Egypt and China strengthen cooperation on the yuan

Egypt and China signed three major financial agreements on July 10th, strengthening their strategic economic partnership. The aim is to promote the use of the Chinese yuan in the Suez Sino-Egyptian economic cooperation zone, a pillar of China’s New Silk Roads initiative.

One of these agreements links the Suez Canal Bank, the Chinese operator TEDA Investment Company and the interbank payment system CIPS, the Chinese equivalent of SWIFT. In concrete terms, the aim is to favor cross-border payments in yuan, thereby reducing dependence on the US dollar.The TEDA Suez zone, which already hosts 185 companies, aims to make Egypt an industrial and logistics crossroads between Africa, Europe and Asia. Support for the CIPS system aims to fluidize transactions and attract more Chinese investment.

The backdrop is a nearly 70-year-old Sino-Egyptian relationship, with bilateral trade of over $17 billion by 2024. The governor of the Central Bank of Egypt has called for new Chinese banks to open in Cairo, and vice versa.

This financial turning point confirms the increasing weight of the yuan in international trade and underlines Egypt’s desire to diversify its partners and currencies against a backdrop of pressure on dollar reserves.

source: Africa news