This study investigates the impact of exchange rate volatility on Foreign Direct Investment (FDI) inflows in Egypt from (2002-2024), Exchange rate volatility is measured using the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model, which captures the dynamic nature of exchange rate movements over time. To assess the impact of this volatility on FDI inflows, the study employs a Vector Autoregression (VAR) model, allowing for the examination of the interrelationships between multiple economic variables. The findings reveal that increased exchange rate volatility is associated with a significant reduction in FDI inflows, highlighting the risk-averse behavior of foreign investors in the face of currency instability. The research underscores the importance of maintaining stable macroeconomic policies and effective currency management to mitigate the adverse effects of volatility, thereby enhancing Egypt's attractiveness as a destination for foreign investment. This study contributes to the understanding of exchange rate dynamics and their implications for FDI in developing countries, providing valuable insights for policymakers.