Picture yourself at the base of the Great Pyramid of Giza, watching the sun set. You may be tempted to take out your wallet and leave a tip for the guide, or you may just want to purchase something. However, once you reach into your wallet to see if you have all the right bills, you may end up feeling lost because managing your money in Egypt is about more than just exchanging your dollars for Egypt Currency.
The first step in planning a luxury cruise on the Nile River or before setting off on a trip through some of Egypt’s most vibrant markets is to learn about the Egyptian Currency. This is how you will be able to enjoy your traveling experience without having to worry about how to pay for something.
5 Things about Egypt Currency You Must Know
There are 5 essential aspects about Egypt Currency that you need to learn first. Once you understand them, only then do you proceed to travel the country or handle their currency. These aspects are described below.
1. The Basics
To adequately manage your money, you must first understand the basic principles of Egypt Currency.
What Is Egypt’s Currency?
It is important for you to know ‘what is the name of the money used in Egypt’.
Prior to reserving flights, many travelers conduct a search online for the term Egypt currency. Egypt uses the Egyptian pound as its official currency (abbreviated as EGP, or ‘Geneh’ in common conversation).
Egypt money follows an easy-to-grasp structure: one pound is equal to 100 piastres. You will find that the denominations of banknotes available are 5, 10, 20, 50, 100, and 200, while there is a limited supply of coins below one pound. Thus, it allows for easy access to cash, as most day-to-day transactions are conducted using notes.
2. Currency and Currency Exchange Rates
Global Currency Exchange Rates determine the conversion of foreign currency to local currency. This impacts how you can spend your money while traveling as a tourist. It also determines how much interest you will earn from investments and what risk you are exposed to from a loss of your investment. This is how you can get your hands on Egyptian money.
The Importance of Exchange Rates
The supply and demand for Egypt Currency in the international market determine the value. If the Egyptian economy is earning greater amounts of foreign currency through tourism, exports, and foreign investment, the Egyptian pound will strengthen. The exchange rate or value of the Egyptian pound will be pressured when foreign debt levels rise significantly or when import levels increase significantly, resulting in an increase in imports.
For example, during the last decade, the Egyptian government implemented many economic reforms to the currency, including adjusting the currency to allow for greater flexibility in the determined value and increasing the amount of currency in circulation.
When the value of the Egypt Currency drops, imported goods become more expensive, which will subsequently lead to an increase in the overall consumer price index (CPI) and all associated inflation pressures.
For tourists, if the Egyptian pound drops in value, it typically will have a greater effect on your purchasing power or how much you can actually spend while in Egypt. However, for residents of Egypt, an increase in the cost of imported goods leads to rising day-to-day living expenses.
Exchanging Money for Foreign Currency
The best places to obtain or exchange your currency are through approved banks, licensed currency exchange companies, airports, and large hotels. You should only exchange/obtain currency from approved or regulated sources, regardless of the amount of money being exchanged, in order to avoid becoming a victim of fraud within Egypt.
While there may also be other forms of obtaining currency on the street, they usually carry serious legal and financial risks associated with being able to obtain currency without government regulation.
3. Inflation & Purchasing Power
One of the most important factors that can change the value of Egypt Currency is inflation. When prices increase quickly, it causes a decrease in the purchasing power of ‘the’ pound.
How does Inflation Affect Everyday Life?
The high level of inflation in the past few months has affected the economy by causing food prices, fuel prices, and housing costs to become extremely high. As people experience rising levels of inflation, there is a corresponding decline in the real value of their currency, given that every pound will now only be able to buy a smaller quantity of goods or services.
While some foreign investors may see a surplus of opportunities created during economic adjustment periods, they consider risk more carefully than domestic investors. It is because currency volatility may offset any gains made by their investment as a result of the devaluation of their currency.
By understanding inflation, you will be better equipped to assess how the currency of Egypt is doing under real-world situations rather than just on paper.
Central Bank Policies
The Central Bank of Egypt makes adjustments to interest rates to control inflation. Constraining inflation through raising interest rates will help to keep price inflation from becoming unreasonably high.
However, if how inflation occurs causes lower levels of overall economic growth, the Central Bank will lower interest rates to induce more borrowing and investing. Lower interest rates may, however, weaken the currency if there is significant inflation to keep pace with.
Therefore, the policy actions made by the Central Bank of Egypt directly affect the performance of the Egyptian currency relative to other currencies on the international market.
4. Cash, Digital Payments, and Daily Life
In Egypt, cash is still prevalent. Cash transactions make up a very large portion of all transactions as digital payment alternatives have developed over time. While there has been growth in the digital payment sector, the prevalence of cash in your day-to-day life remains high.
In cities like Cairo and Alexandria, virtually all malls and all major hotel chains will accept the use of credit or debit cards; however, in local shops and restaurants, smaller businesses are more inclined/web to accept cash payments. When travelling outside of major metropolitan areas, having Egyptian currency is even more of a necessity than it would be in a city.
Understanding how Egyptian Currency/Monies circulate can help you avoid any issues that might occur when you are a tourist using only credit/debit cards in local or rural areas.
The Egyptian government has made a push towards modernising the economy by pushing for a higher use of cashless payments such as digital wallets and banking apps. Despite the rise in cashless purchases, cash is still important in smaller transactions – especially with small businesses.
Understanding how people practically use their currency in Egyptian daily life can help to prepare you accordingly.
5. Risks, Stability, and Future Prospects
The value of currencies is based on the strength of the economy and how confident investors feel about it. Many factors that are interconnected with each other determine the exchange rate of Egypt’s Currency.
Tourism is an important part of the economy as it generates foreign currency revenues. Egypt’s political situation can have an effect on investor confidence. Having a strong amount of foreign currency reserves will help Egypt to defend against any weakening of the value of the Egyptian Pound.
Changes in the price of energy around the globe and changes in the trade balance of Egypt can also impact the stability of the economy.
Volatility and Opportunity
In the last few years, the value of the Egyptian Pound has fluctuated widely. The changes in the value of the Egyptian pound caused uncertainty; however, the fluctuations from year to year will give the Egyptian economy the opportunity to adapt to the pressures of the global economy.
When it comes to short-term fluctuations in the value of the pound affecting the budgets of travelers, it is not a significant factor. When it comes to long-term investments in the Egyptian economy, macroeconomic reform and prudent management of the country’s debt are much more important.
When you analyze Egypt’s Currency, you must look at short-term movements in the exchange rate and long-term reforms to the Egyptian economy. Countries with stable currencies have usually made substantial structural improvements to their economy.
When looking at the sustainability of the current value of the Egyptian pound, investors should pay close attention to inflation rates, levels of foreign reserves, and international agreements related to loans.
Things to Know Before Visiting Egypt or Investing in Egyptian Businesses
You should exchange your money strategically.
Start by exchanging small amounts of money first, and when exchanging larger amounts of money, check the rates beforehand.
Additionally, always carry smaller bills so that you can pay taxi drivers, tip waiters, and make purchases with cash because it will be difficult to exchange larger bills at local shops.
When investing or doing business, track financial reports and updates from the central bank. Managing currency risk is crucial when doing business in an emerging market because even a small change in the exchange rate can seriously impact your profit margin.
The more you understand how Egypt Currency will work with inflation, tourism, and world economies, the more comfortable and relaxed you will be in doing business with Egypt.
Conclusion
Currency is more than just printed paper; it represents the state of the economy and confidence in public and global economies. Now you know ‘what is the name of the money used in Egypt?’.
If you want to make better decisions regarding your finances based on the pound’s structure or the economy’s strength, understanding exchange rates and inflation trends will give you greater confidence when making financial decisions. Aspects like exchange rate fluctuations, inflationary pressures, or other events that are beyond your control might affect you, but knowledge of these events will provide you with the greatest advantage.
This is you having current knowledge of this currency will be immensely helpful for you in this regard.
FAQs (Frequently Asked Questions)
Q1. What is the currency in Egypt?
Egypt Currency is referred to as the Egyptian pound (EGP).
Q2. Can you exchange dollars for Egypt Currency at the airport?
Yes, you can exchange at any Egyptian Airport.
Q3. Is the currency of Egypt stable?
The Egyptian currency has experienced fluctuations in value, but widely accepted for transactions throughout the country.
Q4. Is it possible to use a non-Egyptian currency for transactions in Egypt?
You are required to use Egyptian Pounds for all transactions, but some hotels may allow you to use other currencies for payment.
Q5. Should tourists use the currency of Egypt for cash transactions?
Yes, tourists are encouraged to carry cash in the form of the Egyptian pound for small purchases and local transportation.
