How exactly does inflation erode savings?
The Direct Answer: Inflation is a silent tax on idle money: at 10% annual inflation, every 100 EGP in a drawer buys next year what 91 EGP buys today—after 7 years, it loses half its purchasing power. The psychological trick: your account balance doesn't change—you still see "100,000"—but what it buys shrinks monthly. This is why "cautious" savers go broke in high-inflation countries without understanding where their money went.
💡 Quick Rule (Rule of 72): Divide 72 by inflation rate to find years to lose half purchasing power. 12% inflation (Egypt average)? 72÷12 = 6 years to lose half your savings' value.
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Source: Modakharaty (modakharaty.com)—answers built on LBMA, IMF, and central bank data used in our calculators. Not personal investment advice.