Goldman Sachs expects the Egyptian pound to strengthen steadily over the next 12 months, forecasting the exchange rate to reach EGP46 per US dollar, as improving external financing conditions, stronger foreign exchange reserves and easing regional geopolitical tensions support the currency’s outlook.
In its latest report on the economies of Central and Eastern Europe, the Middle East and Africa, the investment bank estimated the Egyptian pound’s fair value at around EGP43 per dollar, concluding that the currency remains 13–15% below its historical fair value on a real effective exchange rate (REER) basis. The assessment suggests there is further scope for appreciation if macroeconomic conditions continue to improve.
Goldman Sachs projects the pound to strengthen to EGP49 per dollar within three months, EGP48 in six months, and EGP46 over a 12-month horizon, while emphasising that the adjustment is likely to be gradual rather than immediate.
The bank attributed part of the pound’s recent gains to improved regional stability following the extension of the US-Iran ceasefire, which helped restore commercial shipping through the Strait of Hormuz. According to Goldman Sachs, the Egyptian currency has appreciated by more than 4% since mid-June and by over 9% from the lows recorded during the recent regional conflict.
The outlook also reflects stronger investor sentiment towards Egypt, supported by improving external balances, resilient foreign currency liquidity and renewed interest in local-currency debt, although Goldman Sachs stressed that further gains will depend on sustained macroeconomic reforms, continued foreign capital inflows and the preservation of Egypt’s flexible exchange-rate regime.
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