Egypt to permit Chinese companies to use yuan for business
Egypt will soon allow Chinese companies to register and conduct financial transactions in yuan, a move officials say will boost investment and deepen economic ties between the two nations.
Egyptian Minister of Investment and Foreign Trade Hassan El Khatib announced the policy shift this week, confirming that the Central Bank of Egypt will support the initiative. “Egypt will allow Chinese companies to register using the yuan in financial transactions,” El Khatib said in a statement.
Under Egypt’s investment law, foreign companies can already own 100% of businesses in most sectors. The new measure means Chinese firms will be able to open bank accounts in Egyptian banks denominated in yuan, a development experts believe will streamline operations and encourage more Chinese investment, the People's Daily Online reports.
“Licensing Chinese companies to use yuan in Egypt means these firms can open bank accounts with the Chinese currency. The move will encourage more Chinese companies to pump investments in Egypt, which will further expand bilateral economic relations by facilitating trade in local currencies,” said Waleed Gaballah, a member of the Egyptian Association for Political Economy, Statistics and Legislation.
Gaballah explained that Chinese businesses previously needed to convert yuan into U.S. dollars to operate in Egypt, adding costs and complexity. “Now the Chinese companies don’t have to use mediating currency,” he said. “They can use yuan directly within Egypt and transfer their profits back to China in the same currency.”
He noted that the yuan has “succeeded in making a large international presence in payments in recent years,” and that wider use of the Chinese currency will help reduce Egypt’s reliance on the dollar. Gaballah also expressed hope that more Chinese investment and local production could help narrow Egypt’s trade deficit with China.
This story is written and edited by the Global South World team, you can contact us here.
