Cairo (TDI): China and Egypt have signed a memorandum of understanding (MoU) aimed at deepening financial cooperation and encouraging the use of local currencies in trade and investment, the People’s Bank of China announced on Friday.
The agreement was formalized during Chinese Premier Li Qiang’s visit to Cairo, where the signing ceremony was attended by Egyptian Prime Minister Mostafa Kamal Madbouly.
Premier Li, during his talks with Madbouly, said both nations should work together to broaden areas of economic collaboration, with a focus on trade development, digital innovation, and investment in emerging sectors such as electric vehicles, new energy, and artificial intelligence.
The deal sets the stage for broader cooperation between the two countries, including how they handle interest rates, manage payments, and grow their financial sectors. It also calls for more regular communication between their central banks.
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A big part of the agreement is about moving away from using outside currencies like the US dollar, and instead settling trade and investments directly in Egyptian pounds and Chinese yuan whenever possible.
Both sides also agreed to step up cooperation in the field of central bank digital currencies (CBDCs) and digital financial technologies.
The People’s Bank of China said the arrangement would help create a more favorable environment for financial cooperation and deepen policy coordination between the two countries.
Separately, China’s central bank governor Pan Gongsheng held talks in Cairo with Hassan Abdullah, governor of the Central Bank of Egypt. Pan noted the consistent growth in bilateral trade and praised the momentum of economic and financial collaboration.
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He emphasized the importance of expanding local currency swap agreements, improving cross-border payment systems, and encouraging joint investments in financial markets.
Pan also supported the idea of facilitating the mutual establishment of financial institutions in both countries to build long-term stability in economic relations.
Farkhund Yousafzai is an Associate Editor at The Diplomatic Insight.
