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The Central Bank of the UAE (CBUAE) and the Central Bank of Egypt (CBE) have renewed their Dh5 billion ($1.36 billion) currency swap agreement for another five years. The deal is worth the same Dh5 billion, equivalent to roughly 69 billion Egyptian pounds ($1.32 billion), as the original agreement the two central banks signed in September 2023.
The Central Bank of the UAE and the Central Bank of Egypt have renewed their Dh5 billion ($1.36 billion) currency swap agreement for a further five years, at the same value as the original 2023 deal.
The agreement was signed in Abu Dhabi by CBUAE governor Khaled Balama and Central Bank of Egypt governor Hassan Abdalla, and is intended to promote settling bilateral trade in local currencies rather than through a third currency.
The renewal lands the same week the CBUAE gave preliminary approval for Egypt’s National Bank to take over Banque Misr’s UAE branches, two separate signals of deepening UAE-Egypt financial ties.
The renewal was signed in Abu Dhabi by CBUAE governor Khaled Balama and CBE governor Hassan Abdalla. Balama said,
“The deal marks a significant step forward in our efforts to promote greater use of local currencies in bilateral settlements.”
Abdalla said,
“The renewal supports joint efforts to deepen economic ties” and strengthens financial market resilience between the two countries.”
One swap among several
The UAE has built out a small network of these bilateral currency swap lines: Dh20 billion with Bahrain (April 2026), Dh18 billion with China (renewed November 2023), an agreement with Turkey dating to 2022, and reported negotiations with the US as of May 2026. A currency swap line lets each central bank access the other’s currency directly, without routing bilateral trade settlement through the US dollar or another third currency, a tool central banks use to manage currency-liquidity risk and support local-currency trade settlement rather than a lending facility in the ordinary sense.
Why it matters
Bilateral trade between the UAE and Egypt reached $9.7 billion in 2025, up 62% year on year, with Egyptian exports to the UAE roughly doubling to $7 billion. This swap renewal lands in the same week the CBUAE gave preliminary approval for Egypt’s National Bank to take over Banque Misr’s UAE branches, after Banque Misr was named alongside Bank Melli Iran in a US Treasury action targeting Iran-linked transactions. Read together, a currency swap renewal and a bank-takeover approval in the same week point in the same direction: closer UAE-Egypt financial integration, even as the CBUAE simultaneously moved to bar Bank Melli’s UAE branches from Iran transactions entirely.
What’s next
Neither central bank has disclosed usage data for the existing swap line, how much of it (if any) has actually been drawn since 2023, or specific new bilateral-settlement products expected to follow from the renewal. Whether this swap line sees active use, rather than functioning as a standing but rarely drawn facility, is the concrete thing worth tracking next.
FAQs
What is a central bank currency swap agreement?
An arrangement letting two central banks exchange their own currencies with each other, giving each access to the other’s currency directly rather than through the US dollar or another third currency. It’s typically used to support local-currency trade settlement and manage currency-liquidity risk, not as an ordinary lending facility.
How big is the UAE-Egypt currency swap?
Dh5 billion ($1.36 billion), unchanged from the original 2023 agreement, renewed for a further five years from 29 September 2026.
Which other countries does the UAE have currency swap agreements with?
Bahrain (Dh20 billion, April 2026), China (Dh18 billion, renewed November 2023) and Turkey (since 2022), with reported negotiations underway with the US as of May 2026.
How does this connect to the Banque Misr story?
The swap renewal was announced the same week the CBUAE gave preliminary approval for Egypt’s National Bank to take over Banque Misr’s UAE branches, following a separate US Treasury action against Banque Misr. The two developments aren’t formally linked, but both land in the same week and point toward closer UAE-Egypt financial ties.
Editor’s Take: Usage is the number worth checking against reality here: neither central bank has said how much of the original 2023 line was actually drawn in the three years since, and a renewal at an identical value could mean either steady real use or a standing facility that’s mostly symbolic. $9.7 billion in bilateral trade in 2025, up 62% year on year, gives this renewal a real economic backdrop rather than pure diplomatic signalling. A swap renewal and a bank-takeover clearance in the same week, alongside a transaction ban on the other bank named in the same US action, are three different CBUAE moves toward Egypt and Iran-linked banking risk landing in the same short window.