By Wael Salem
Egypt received $25.5 billion in remittances from workers in other countries in the first seven months of the current 2025/2026 fiscal year, the Central Bank of Egypt (CBE) has said.
With this, the remittances rank as the country’s second-largest source of foreign currency after the exports, surpassing revenues from tourism sector and the Suez Canal.
The remittances’ figure is telling, especially in the light of current regional geopolitical tensions and the US-Israeli war on Iran.
“These are not mere financial transfers, but a vital pillar of macroeconomic stability,” capital markets expert, Hanan Ramsis, said.
Speaking to The Egyptian Gazette, she described the remittances as the “most resilient” foreign currency inflows, being driven by social obligations, rather than market cycles.
These inflows, Ramsis said, help stabilise the national currency, preventing sharp fluctuations in the exchange rate of foreign currencies that could harm the local economy.
“The government keeps channelling transfers through official banking venues, curbing leakage into the black market,” she added.
Beyond stabilising the national currency, remittances enable Egypt to meet its obligations to other countries and international institutions.
Delays in clearing remittances triggered capital outflows in the past and prompted many foreign investment funds to exit the Egyptian market.
Unlike external borrowing which carries interest costs and debt service obligations, Ramses said, remittances provide essential liquidity without added expense.
She noted that maintaining these inflows would require strong diplomatic relations with other countries, safe employment conditions for expatriate workers, and policies that avoid unnecessary costs or obstacles that discourage official transfers.
Leading economist, Sahar El-Damaty, said remittances complement other key foreign currency sources, such as the exports, tourism, foreign direct investments, government debt instruments, and Suez Canal revenues.
Before current geopolitical disruptions, tourism revenues approached $18 billion, foreign direct investments reached around $18 billion, and debt instruments amounted to approximately $38.5 billion.
“In a flexible exchange rate system, the supply of foreign currency directly influences the exchange rate: a higher supply lowers the dollar price, while a shortage drives it up,” El-Damaty said.
“Remittances bolster the supply, helping to stabilise the pound and prevent sharp fluctuations,” she told this newspaper in an interview.
El-Damaty noted that this vital cash inflow meets foreign currency needs while limiting the growth of the black market.
When official currency channels are insufficient, she said, informal markets flourish, creating economic inefficiencies and risks.
“A steady inflow of remittances ensures that both citizens and production sectors can access the foreign currency they need through official channels,” El-Damaty said.
The remittances remained remarkably robust in the past years, even in times of economic turbulence and heightened regional tensions.
She expected this revenue source to reach $40–41 billion by the current fiscal year’s end.
“If geopolitical conditions were to worsen, remittances, like other foreign currency sources, would naturally be affected,” El-Damaty cautioned.
Initiatives launched by the government and the CBE in the past years have succeeded in bolstering official remittance channels.
Key measures include adopting a flexible exchange rate determined by supply and demand, alongside strict legal measures to prevent the emergence of a black market.
These policies ensure that the banks would remain the primary source of foreign currency for both individuals and businesses.
Macroeconomic reforms implemented last year, prior to the recent surge in regional tensions, helped push remittances to a record level, while eliminating black-market activity and strengthening financial controls stabilised currency flows.
Reduced inflation, lower interest rates, and controlled liquidity have created conditions favourable to remittance growth.
El-Damaty said digital platforms, such as InstaPay, have further simplified transfers, enabling Egyptians abroad to send funds directly into their accounts at home.
“These measures increase foreign currency availability, covering not only six months of imports but also providing a buffer against market volatility,” she explained.
She added that the same measures also facilitate timely settlement for foreign companies operating in Egypt and support overall macroeconomic stability.
She warned against the concentration risks entailed in overreliance on remittances. Nonetheless, El-Damaty expected the remittances to rise if regional tensions ease.
“Most of the remittances come from Gulf Cooperation Council member states, even as significant numbers of Egyptian workers are present in Europe,” El-Damaty said.
“Once conflicts subside, we can expect flows to increase further,” she added.
For families dependent on these funds, the stakes are immediate.
Nagwa Moustafa, a mother of three from Benha in Qaluibia Governorate, said she and her children totally depend on the money her husband, who works in the Gulf, sends each month.
“If anything bad happens, it will affect us very negatively,” she said.
Her experience reflects a broader reality: global geopolitical shifts are no longer distant events. Rather, they shape the daily lives of millions of Egyptians, linking international developments directly to domestic economic stability.
The impact of remittances also extends far beyond individual families.
They finance education, healthcare, and housing for millions of people, while also fuelling local markets and small businesses.
In many communities, particularly in rural areas, years of income sent from abroad have translated into improved living standards and expanded opportunities.
