China's central bank on Tuesday signed a currency swap agreement with its Egyptian counterpart worth 18 billion yuan (about 2.62 billion U.S. dollars) to strengthen trade and financial cooperation, Xinhua reported on Tuesday. The deal, signed between the People's Bank of China (PBOC) and the Central Bank of Egypt, will last for three years and can be extended upon agreement of both sides, the PBOC said in an online statement. The currency swap deal allows the two institutions to exchange payments in one currency for equivalent amounts in the other, to facilitate bilateral trade settlements and provide liquidity support to financial markets. "The position of the central bank is definitely increasing, with more firepower denominated in foreign currency to stabilise the Egyptian pound when needed. So this is definitely something positive," Hany Farahat, senior economist at Cairo-based CI Capital told Reuters. The deal aims to maintain financial stability in the two countries and facilitate bilateral trade and investment, the PBOC said.
