Egypt, China agree on a currency swap

According to media reports, the Egyptian and Chinese Central Banks signed a currency swap agreement worth 18 billion yuan ($2.62 billion). As part of the agreement, Egypt will be able to use the Chinese yuan in transactions with China while China will be able to use Egyptian pound in transactions with Egypt, the senior economist at investment bank CI Capital said.

The reports indicated that the agreement is expected to boost Cairo’s foreign reserves, which have been under pressure since the political and economic confusion resulted from the uprising in January 2011.

Egypt’s Central Bank said in its website that the agreement has been signed initially for three years but can be extended later upon the consent of both parties.