By Enyichukwu Enemanna
The Central Bank of the United Arab Emirates (CBUAE) and Central Bank of Egypt (CBE) on Thursday reached a bilateral agreement to swap their local currencies to the tune of over $1 billion as Cairo suffers hard currency crunch.
In a joint statement endorsed by the CBUAE and CBE, the apex banks said the deal allows for the exchange of UAE Dirhams and Egyptian pounds with a nominal amount of 5 billion dirhams ($1.36 billion) and 42 billion of the Egyptian pounds.
Arising from the shortage of hard currency, the Egyptian pounds has suffered a drop in value by about half against the dollar since March 2022 when Russia invaded Ukraine.
The United Arab Emirates, along with other Gulf countries, including Saudi Arabia and Qatar, have made deposits in Egypt’s central bank and pledged major new investments there to ease the country’s financial difficulties.
“The CBUAE is keen to deepen its cooperation with the CBE to achieve common interests, positively impact the trade, investment and financial sectors, and enhance financial stability,” CBUAE Governor Khaled Mohamed Balama was quoted to have said in the statement.
Egypt’s Central Bank Governor Hassan Abdalla added: “I am confident (the agreement) will bolster cooperation between both financial sectors in their respective currencies”.
