Egypt expects to renew a bilateral currency swap deal worth $2.7 billion with China by next December, central bank governor Tarek Amer said on Thursday.
Egypt’s central bank signed an 18 billion yuan-currency swap deal in December 2016 with the People’s Bank of China, a move that aims to promote trade and investment along with maintain financial stability in both countries.
The deal allows the two institutions to exchange payments in one currency for equivalent amounts in the other, to facilitate bilateral trade settlements and provide liquidity support to financial markets.
China has carried out swaps with more than 30 central banks around the world to increase the use of the yuan as a global reserve currency and to stimulate bilateral trade. The yuan is traded onshore against 16 major currencies.
The deal will allow Egyptian importers to source yuan directly, facilitating imports from China whilst reducing demand for dollars and easing pressure on the Egyptian pound.