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10 things you need to know about Egypt-UAE currency Swap

Egypt and UAE signed on Thursday an agreement for currency exchange, but what does that mean? Here are 10 facts about the agreement.
© Egypt Business Directory

A currency swap agreement, often referred to simply as a currency swap, is a financial contract between two parties, typically corporations or financial institutions, to exchange one currency for another at a specified date in the future. These agreements are used primarily to manage currency risk, reduce borrowing costs, and optimize financial operations.

Here are 10 facts about the deal between Egypt and the UAE:

  1. On September 28, 2023, the Central Bank of the United Arab Emirates (UAE) and the Central Bank of Egypt (CBE) signed a bilateral agreement.

  2. Khaled Mohammad Al-Ama, the Governor of the Central Bank of the UAE, and Hassan Abdalla, the Governor of the CBE, were the signatories.

  3. The agreement allows for the exchange of Emirati dirhams and Egyptian pounds.

  4. The Central Bank of the UAE released a statement confirming the agreement.

  5. Both parties can exchange their respective local currencies, with a limit of 5 billion Emirati dirhams and LE 42 billion.

  6. The currency exchange agreement underscores the strong bilateral relations between the UAE and Egypt.

  7. The leaders of both countries are committed to fostering economic and financial cooperation.

  8. The agreement is seen as an opportunity to boost economic ties, trade, investment, and financial stability.

  9. The Governor of the Central Bank of Egypt, Hassan Abdalla, emphasized the continuous cooperation between the UAE and Egypt.

  10. The currency exchange operation is a significant step toward enhancing financial cooperation between the two nations using their local currencies.