UAE and Egypt sign currency swap agreement

The central banks of the United Arab Emirates and Egypt have signed a bilateral swap deal in local currencies to boost trade and bolster financial stability.

The agreement allows for the exchange of UAE dirhams and Egyptian pounds with a nominal amount of up to AED5 billion ($1.36 billion) and EGP42 billion, the UAE state-run Wam news agency reported.

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The Central Bank of UAE governor Khaled Mohamed Balama said the bilateral currency swap agreement is an opportunity to promote cooperation and develop the respective economic and financial markets.

“The Central Bank is keen to deepen its cooperation with the Egypt central bank to achieve common interests, positively impact the trade, investment and financial sectors, and enhance financial stability,” said Balama.

Egypt’s central bank governor Hassan Abdalla added: “I am confident (the agreement) will bolster cooperation between both financial sectors in their respective currencies”.

Egypt has been facing a hard currency crunch, with the pound falling by nearly half against the dollar since March 2022 following the Russia-Ukraine conflict.

The UAE, Saudi Arabia and Qatar have deposited in Egypt’s central bank, pledging significant investments to ease the country’s financial woes.