Central Banks of UAE and Egypt Renew $1.36 Billion Swap Agreement

On 29 September 2026, the Central Bank of the United Arab Emirates (CBUAE) and the Central Bank of Egypt (CBE) renewed their bilateral currency swap agreement worth AED 5 billion ($1.36 billion) for another five years, strengthening financial cooperation and supporting the use of local currencies in cross-border trade. 

CBUAE Governor Khaled Mohamed Balama and CBE Governor Hassan Abdalla signed the agreement at the CBUAE headquarters in Abu Dhabi. The swap covers the UAE dirham and Egyptian pound, with AED 5 billion currently equivalent to about EGP69 billion.

The two central banks first signed the swap agreement in September 2023. Its extension comes as trade and investment links between the UAE and Egypt continue to expand.

Supporting local-currency trade

The central banks noted that the renewal of the MoU would enhance bilateral trade and financial cooperation and contribute to the development of both nations’ economies.

It also facilitates increased use of the dirham and Egyptian pound in bilateral operations, providing banks and companies with one more means of conducting trade without fully using any third country’s currency.

According to Balama, the extension is evidence of the strength of the strategic partnership between the UAE and Egypt and the willingness of both nations to cooperate further in the finance and banking sectors.

He noted that it would contribute to financial stability and increase trade and investment between the two nations.

Abdalla pointed out that the extension was based on the close cooperation between the two central banks and would allow strengthening economic relations.

Growing trade ties

This is taking place amid growing commercial ties between the two nations. Bilateral trade stood at around $9.7 billion in 2025 compared to about $6 billion in 2024, according to the UAE Ministry of Foreign Affairs.

Trade from Egypt to the UAE more than doubled from $3.3 billion in 2024 to around $7 billion in 2025, while trade from the UAE to Egypt was around $2.7 billion.

More than 1,800 firms from the UAE are doing business in Egypt in areas such as real estate, energy, infrastructure, tourism, finance, technology, and telecoms.

The rising trade has added to the importance of the payment and settlement channels between the two nations. Greater use of local currencies may provide companies and financial institutions with a way to conduct cross-border business.

$1.36 billion is the approximate US dollar equivalent of the AED 5 billion currency swap arrangement. It is not a new financial aid package worth $1.36 billion to Egypt.

Egypt's external position

The extension comes as Egypt continues efforts to strengthen its external position and rebuild economic buffers.

Egypt remains under an IMF-supported economic programme. In July, the IMF Executive Board completed its seventh review under the Extended Fund Facility and second review under the Resilience and Sustainability Facility, allowing Egypt to access about $1.8 billion under the two programmes.

The IMF said Egypt had entered the latest period of regional conflict with stronger macroeconomic buffers, supported by exchange-rate flexibility, tighter monetary policy, and higher international reserves.

Gross international reserves reached 119% of Egypt's reserve adequacy metric by the end of June 2026, the IMF said. The Fund also said the authorities had made progress on fiscal consolidation and reforms, although efforts to reduce the state's role in the economy and advance the divestment programme remained slower than expected.

On 24 September, the CBE kept its key interest rates unchanged, leaving the overnight deposit rate at 19% and the lending rate at 20%.

The CBE also reported net international reserves of about $57.21 billion at the end of August 2026, according to provisional figures.

Part of wider UAE financial cooperation

The latest agreement forms part of the UAE's broader network of currency-swap arrangements with international partners.

The UAE has existing swap agreements with countries including China and Türkiye and signed an AED 20 billion currency-swap agreement with Bahrain in April 2026.

Currency swaps allow participating central banks to access each other's currencies under agreed terms. They can support trade settlements, improve financial cooperation and provide an additional channel for cross-border transactions.

For the UAE and Egypt, the renewed agreement provides continuity for financial cooperation as their wider economic relationship grows.

Five-year extension

The agreement will remain in place for five years, with the nominal value unchanged at AED5 billion. Its Egyptian-pound equivalent has risen to about EGP69 billion because of changes in the exchange rate between the two currencies.

The central banks said they would continue working to strengthen banking and financial cooperation and support financial stability and economic growth.

For companies trading between the UAE and Egypt, the arrangement provides an established local-currency settlement option alongside existing international payment channels. Its practical impact will depend on how widely banks and businesses use it and on the future development of bilateral trade.

The renewal reinforces the financial ties between two economies whose relationship spans trade, investment, infrastructure, energy, logistics, and real estate. With bilateral trade reaching $9.7 billion in 2025, the agreement provides another channel to support these expanding economic links.