Economists recently discussed the numerous advantages the Egyptian economy stands to gain from the Egypt-UAE currency swap agreement. Signed in late 2023, this deal allows both nations to exchange local currencies directly. Specifically, the agreement facilitates the exchange of the Egyptian pound and the UAE dirham with a nominal value of up to LE42 billion or five billion AED. Consequently, this arrangement provides a significant boost to bilateral economic relations.
Reducing Dollar Dependency through the Egypt-UAE Currency Swap
One major benefit of this involves the reduced pressure on US dollar demand within Egypt. According to financial experts, this deal provides the country with its essential needs for goods and services without requiring hard currency conversions. Furthermore, it strengthens the close relations between the two countries at all levels. Hassan Abdullah, Governor of the Central Bank of Egypt, stated that the agreement contributes to increasing the volume of trade exchange. Therefore, businesses in both regions can operate with greater financial certainty.
Enhancing Financial Stability and Market Development
Khaled Mohamed Balama, Governor of the Central Bank of the UAE, noted that the Egypt-UAE currency swap reflects the depth of bilateral relations. This agreement constitutes an important opportunity to develop economic and financial markets between the two sides. Moreover, the move reflects positively on the commercial, investment, and financial sectors. By providing extra liquidity in local currencies, the central banks enhance overall financial stability. Consequently, this collaboration ensures a more resilient economic environment for future investments.
Courtesy:- egyptindependent
