Egypt and China expand currency swap to boost yuan usage
Experts say reduced reliance on the US dollar will not happen immediately despite the renewed agreement.
Quick Look
Egypt and China have renewed and expanded a currency swap agreement to promote the use of the yuan in trade and investment, though analysts note a shift away from the US dollar will be gradual.
AI-generated summary
Why It Matters
The People's Bank of China and the Central Bank of Egypt renewed their currency swap in June, increasing its value.
Egypt’s expanded currency swap with China may help bring the yuan into wider use in trade and investment, but experts say any reduced reliance on the US dollar will not happen in a hurry.
The People’s Bank of China and the Central Bank of Egypt renewed the swap in June, extending it for three years and increasing its value from 18 billion yuan, also known as the renminbi.
In their statement, Xi and el-Sisi “welcomed the renewal of the local currency swap agreement and the expansion of its scale”, and encouraged Chinese and Egyptian financial institutions to support industrial and development investment, infrastructure and green and digital projects.
John Calabrese, a non-resident senior fellow at the Washington-based Middle East Institute, said “the reference to yuan use is probably significant”.
Open Questions
- What is the exact new financial value of the expanded swap?
