A deal has been reached between China and Egypt for a massive currency swap that will mutually benefit both countries.
In an effort to stabilise the economy, Egypt’s Central Bank announced on Tuesday that it has signed a bilateral currency swap agreement with the People’s Bank of China for 18 billion yuan over three years.
According to a press statement released by the Central Bank of Egypt, the agreement will be valid for three years and is open to extension claiming that it is a “mutually beneficial arrangement for both countries,” adding that, "This deal emphasises the long-standing relationship between both nations and showcases China's support for Egypt's homegrown reform program."
The deal will likely help importers and facilitate trade as it is expected to help improve foreign currency liquidity in a cash-strapped Egypt. Meanwhile, China hopes the deal will benefit them as they have recently swapped currency with more than 30 central banks around the world in an effort to make the yuan a global reserve currency and stimulate bilateral trade.