A significant boost in financial trade between the UAE and Egypt is anticipated following the formalization of a currency swap agreement by the monetary authorities of both nations.
In accordance with a press statement, the central banks of the two countries have inked a pact concerning the exchange of the UAE dirham and the Egyptian pound. This agreement, signed by Governor Khaled Mohamed Balama of the Central Bank of the UAE and his Egyptian counterpart, Governor Hassan Abdullah, facilitates the exchange of local currencies between the two entities, with a maximum size of 5 billion dirhams ($1.36 billion) and 42 billion Egyptian pounds.
A currency swap agreement is a legally binding contract detailing the terms and conditions for currency exchange and periodic interest payments between two parties.
Balama, in his remarks about the agreement, emphasized that it underscores the robust relationship between the two nations and presents an opportunity to foster cooperation while enhancing their respective economic and financial markets. He also stated, “In line with the efforts of the UAE and Egypt’s leadership to collaborate more broadly across multiple areas, the CBUAE is keen to deepen its cooperation with the CBE (Central Bank of Egypt) to achieve common interests, positively impact trade, investment, and financial sectors, and enhance financial stability.”
Abdullah, likewise, underscored the agreement’s significance in reinforcing the ongoing strong relations between the UAE and Egypt. He expressed confidence that the agreement would further enhance cooperation between the financial sectors of both countries in their respective currencies.
Before the agreement was finalized, Abdullah held discussions with his Chinese counterpart, Pan Gongsheng, in Beijing. During this meeting, the two leaders deliberated on various topics aimed at strengthening economic and financial cooperation between their countries, with the currency swap agreement being one of the prominent subjects. Additionally, the talks covered the Egyptian government’s plans to issue panda bonds denominated in Chinese yuan.
Furthermore, officials encouraged Chinese and Egyptian banks to establish a presence in each other’s countries to facilitate greater financial integration between their economies.
(Source: Arab News)
