Egypt's major commercial banks are now able to offer a range of Chinese currency transactions according the Economic and Commercial Counsellor's Office of the Chinese Embassy in Egypt.

This means that selected banks will be able to provide yuan-denominated letters of credit (L/Cs) as agreed by the Egyptian and Chinese authorities three years ago.

Participating banks

Banks including Banque Misr, Commercial International Bank and National Bank of Egypt may now issue L/Cs and provide currency exchange and settlement of accounts in yuan according to the counsellor's office.

Nigeria and South Africa have also signed currency swap deals with China indicating increasing Chinese interest in trading on L/C terms with African counterparties.

Currency swap

Three years ago the central banks of China and Egypt signed an 18 billion yuan (about US$2.56 billion) bilateral local currency swap agreement, with the aim of facilitating bilateral trade and investment.

The currency swap deal signed in December 2016 also helped the North African nation to shore up its foreign reserves after floating its currency in the previous November.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.