First Advice: How Much Will a Stronger Dollar Cost Egypt?

An additional EGP11.48bn in potential monthly costs, against accounting gains of just EGP1.05bn, highlights the disparity in First Bank’s calculations of the dollar’s impact on strategic imports, external debt service and Suez Canal revenues.

The gap comes as the average dollar selling rate reached EGP54.1936 in early trading on Monday, 9 November 2026, compared with EGP51.246 on 9 September, a difference of nearly EGP3, assuming the latest rate persists.

First Bank’s calculations show that every EGP1 increase in the dollar exchange rate raises strategic import costs by around EGP2.40bn and external debt service costs by EGP1.5bn, adding EGP3.90bn overall, assuming unchanged foreign currency requirements.

Strategic imports and debt service: mounting pressure on the foreign currency bill

The first impact is reflected in the strategic import bill, which averaged approximately USD2.40bn monthly for wheat, crude oil, petroleum products and medicines, according to Central Bank of Egypt data covering July 2025–March 2026.

Meeting these monthly needs required approximately EGP122.80bn at a dollar selling rate of EGP51.246. The cost rises to EGP129.87bn at the current rate of EGP54.1936, an increase of EGP7.06bn per month.

Pressure also extends to external debt service, which averages approximately USD1.5bn monthly. Its reference cost in local currency rises from EGP76.87bn to EGP81.29bn at the two exchange rates, representing an additional EGP4.42bn.

The figures show that a higher dollar exchange rate increases the local currency cost of meeting the same foreign currency requirements, even without any rise in the volume of dollar-denominated obligations.

Suez Canal revenues: EGP gains fall short of offsetting higher costs

Conversely, the dollar’s rise increases the local currency value of some foreign currency revenues, foremost among them the Suez Canal, whose monthly revenues averaged approximately USD356.33mn during the period under review.

Applying the two dollar buying rates, the calculated value rises from EGP18.23bn at EGP51.146 to EGP19.28bn at EGP54.0936, generating an accounting gain of EGP1.05bn per month overall.

These potential gains cannot offset the additional burdens of imports and debt service, whose combined costs rise by approximately EGP11.48bn monthly, compared with EGP1.05bn in Suez Canal gains, leaving an accounting gap of EGP10.43bn.

The results show that while a higher dollar may benefit some foreign currency revenues, it imposes greater costs on strategic imports and external debt service, widening the gap between increases in revenues and obligations.

The gap becomes more significant if the dollar remains at its latest levels, as higher procurement costs could shift from a temporary exchange rate effect to a recurring monthly burden, assuming requirements remain unchanged.

Furthermore, a higher dollar may improve the price competitiveness of Egyptian exports and tourism, while increasing the attractiveness of foreign direct investment funded from abroad, as dollar costs decline for projects using local inputs and services.

However, these benefits are reflected indirectly in the state treasury, unlike the direct impact of exchange rate movements on the cost of strategic imports and external debt service, which places pressure on public finances.