China and Egypt Deepen Financial Ties with New Currency and Digital Cooperation Agreement

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The People’s Bank of China (PBOC), China’s central banking authority, announced on Friday that it has entered into a significant agreement with the Central Bank of Egypt to boost financial collaboration between the two nations. The memorandum of understanding (MoU), signed on Thursday, outlines a roadmap for strengthening bilateral monetary cooperation through multiple channels, including the promotion of local currency settlements and joint efforts in central bank digital currencies (CBDCs) and digital innovation.

Pan Gongsheng, Governor of the PBOC, emphasized that economic and financial engagement between China and Egypt is advancing steadily, as evidenced by a consistent rise in bilateral trade volumes. He stressed the importance of this partnership in the face of growing global economic uncertainties.

Under the agreement, both central banks have committed to enhancing practical cooperation in several key areas:

• Local Currency Use: Promoting the use of the Chinese yuan and the Egyptian pound in bilateral trade and financial transactions, thereby reducing dependency on third-party currencies.
• Digital Currency Collaboration: Exploring cooperative frameworks related to the development and potential interoperability of central bank digital currencies.
• Payment System Integration: Facilitating smoother cross-border transactions by linking and improving the interoperability of each country’s payment and settlement infrastructure.
• Financial Market Cooperation: Encouraging mutual investment opportunities and facilitating financing channels in each other’s financial markets.
• Institutional Presence: Supporting the establishment of financial institutions in both China and Egypt to enhance on-the-ground financial services and economic cooperation.

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Pan noted that these initiatives will offer more efficient, convenient, and accessible financial services for businesses operating between the two nations. By simplifying trade, investment, and financing processes, the agreement is expected to provide a solid foundation for the long-term development of the China-Egypt comprehensive strategic partnership.

This move represents a strategic alignment in global finance and a step toward greater economic sovereignty for both countries through local currency usage and digital transformation.