The UAE and Egypt have agreed to renew their Dh5 billion ($1.36 billion) currency swap agreement as the two nations seek to further bolster their economic development.
The refreshed deal, which is also equivalent to 69 billion Egyptian pounds ($1.32 billion), will be valid for five years and is aimed at enhancing trade relations and financial co-operation, the UAE Central Bank said in a statement on Tuesday.
The agreement was signed by CBUAE governor Khaled Balama and Central Bank of Egypt governor Hassan Abdalla, in Abu Dhabi. The UAE and Egypt first agreed to a currency swap deal in September 2023 at the same value.
A foreign currency swap is an agreement to exchange currency between two parties, in which they swap principal and interest payments on a loan made in one currency for a loan of equal value in another currency.
The agreement "demonstrates our shared commitment ... [and] contributes to financial stability and facilitates trade and investment flows between the two countries", Mr Balama said.
"It also marks a significant step forward in our efforts to promote greater use of local currencies in bilateral settlements, in line with international best practices, thereby strengthening the resilience of the financial system in both countries," he added.
The UAE, the Arab world's second-largest economy, has been taking steps to protect its financial system amid intensifying regional uncertainty.
Currency swaps are part of this strategy. In April, the Emirates and Bahrain signed a Dh20 billion agreement to reinforce monetary co-operation and support trade and investment between the two Gulf countries.
The UAE also has Dh18 billion swap deals with China, which was renewed in November 2023, and Turkey, which was forged in 2022. In May this year, it was reported that the UAE was in negotiations with the US for a similar deal – further putting the spotlight on a tool that is considered to be central to the plumbing of the global financial system.
Additionally, the CBUAE introduced a financial resilience package to support lenders, designed to ensure continued lending and maintain stability, as geopolitical tension linked to the Iran war weighed on markets.
Meanwhile, Egypt, the Arab world's most populous nation, remains a major economic partner of the UAE, with economic ties having expanded substantially in recent years. Bilateral trade between the two nations hit about $9.7 billion in 2025, a nearly 62 per cent year-on-year jump, latest data from the UAE Ministry of Foreign Affairs shows.
Exports from Egypt more than doubled to $7 billion last year, while imports from the UAE reached about $2.7 billion, the ministry said. Egypt is also a top player in the UAE’s non-oil foreign trade, which rose 13.1 per cent annually in the first half of the year to Dh1.937 trillion, government data showed in July.
"The renewal of the local currency swap agreement ... builds on the close co-operation ... and supports joint efforts to deepen economic ties," Mr Abdalla said. "The agreement ... [is vital to] enhancing the resilience of financial markets in both countries. We look forward to this agreement creating broader opportunities for co-operation in finance and investment, contributing to economic development objectives in both countries."
