China expands currency swap with Egypt as trade ties reach new heights

Chinese President Xi Jinping and his Egyptian counterpart Abdel-Fattah el-Sisi this week backed greater use of their currencies, while linking closer financial ties to plans for new factories, energy projects and digital infrastructure.

A joint statement released on Wednesday during Xi’s state visit to Cairo also envisions building Egypt up as a regional industrial and logistics hub, leveraging Chinese technology transfers and investment to anchor Cairo’s role within the expanded Brics emerging economies bloc as a gateway for regional and global markets. However, analysts said whether genuine domestic capacity would increase depended on Egypt’s negotiation of the terms.

Cairo already has a 30 billion yuan (US$4.47 billion) swap arrangement with Beijing and has borrowed through a panda bond issued in China’s domestic market. Whether Egyptian and Chinese companies use the yuan regularly will be the main test of the currency push.