Egypt and India explore local currency trade settlement

Egypt discussed with India’s ambassador to Egypt the possibility of entering Indian financial markets, Egypt’s finance ministry said in a statement on Tuesday.

“The two sides discussed ways to encourage the use of national currencies to settle payments,” in a meeting between Egyptian finance minister Mohamed Al Maait and ambassador Ajit Gupte, the statement said.

Egypt was keen to diversify funding sources and enter new financial markets, including “the possibility of heading to Indian financial markets”, the statement quoted Al Maait as saying.

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In June, sources told Reuters that India was weighing a proposal to begin barter trade with Egypt in goods like fertiliser and gas, as part of a wider deal that could see New Delhi extending a credit line worth several billion dollars to Cairo.

Egypt, facing a severe foreign currency shortage, has been struggling to attract foreign investment. Last month it issued 3-year panda bonds worth 3.5 billion yuan, and the China Development Bank disbursed 7 billion yuan ($956.61 million) in a loan agreement with Egypt’s central bank.

This month Cairo also sold almost $500 million (75 billion yen) in 5-year Japanese Samurai bonds.