China and Russia are the most likely countries to exchange trade in local currencies with Egypt

The head of the Egyptian Businessmen Association, Ali Issa, said that China and Russia are the most likely countries to exchange trade with Egypt in local currencies.

Issa added in an interview with Al Arabiya on Wednesday: “We are waiting for a breakthrough in dollar liquidity soon, and there is evidence indicating that it will expire at the end of this year or the beginning of 2024, and there will be a single price for the currency inside and outside banks, as was the case before 2022.”

Exchanging local currencies is beneficial for Egypt

Issa pointed out that the trade balance between Egypt and the countries with which it has signed currency exchange agreements is not in Egypt’s favor, so exchange in local currencies will be more beneficial to Egypt.

He suggested that China may be the first country to implement the decision to trade in local currencies with Egypt, and currencies can be easily exchanged between the two countries. There is also an agreement to swap debts with China for assets in Egypt, while Russia will be the second country to implement currency exchange operations with Egypt.

Two-way trade

Egypt began negotiating with a number of countries to implement intra-trade using local currencies, the most important of which are Saudi Arabia, Turkey, India, Kenya, and Russia.

This step comes within the framework of Egypt's efforts to reduce pressure on foreign exchange and stimulate foreign trade.

Egypt has been suffering from a foreign currency scarcity crisis since the outbreak of the Russian-Ukrainian war, which led to the withdrawal of about $23 billion in foreign investments from government debt instruments.

Countries that abandoned the dollar

Brazil and China announced that they had agreed to use their local currencies in trade with each other, instead of using the dollar.

Bangladesh

Last April, Bangladesh paid Chinese yuan to Russia, which has a nuclear power plant.

This Russian-Bangladesh deal was an example of what the country would like to do during the coming period, after the country failed to pay in dollars.

Bangladesh also settled deals with China in Chinese yuan instead of US dollars.

Iran

Tehran has long used the Chinese yuan in its dealings with China, as Beijing buys oil from Iran with the yuan, and the Chinese operation represented an important way for Tehran to import or export away from US sanctions.