The Central Bank of the UAE and the Central Bank of Egypt signed the renewed agreement on 29 September 2026. The facility carries a nominal value of AED5 billion, equivalent to approximately US$1.36 billion or EGP69 billion. It supports trade, investment and financial cooperation between both countries.
Khaled Mohamed Balama, governor of the UAE central bank, and Hassan Abdalla, his Egyptian counterpart, both signed the deal. Balama said the agreement would support financial stability and facilitate trade between the two markets. Abdalla described it as a practical tool for settling commercial and financial transactions in local currencies.
How the facility works
The swap allows banks and businesses to settle eligible bilateral transactions in dirhams and Egyptian pounds. It reduces reliance on dollar settlement for qualifying trade and financial flows. The original AED5 billion facility was first signed in September 2023. The renewal retains the same nominal value and extends the framework by five years.
That extension matters. A longer runway gives banks and corporates time to build local-currency settlement into their operations. It also signals sustained institutional commitment from both central banks. The deal does not replace conventional correspondent banking, but it adds a meaningful parallel channel.
What does the deal mean for investors?
The timing carries significance beyond the headline figures. The renewal comes shortly after the US Treasury’s Financial Crimes Enforcement Network proposed a measure targeting Banque Misr‘s UAE operations. The proposal, announced in August, would prohibit US financial institutions from maintaining correspondent accounts for those UAE branches. It had not taken effect at the time of signing.
The US Treasury alleged links between Banque Misr’s UAE branches and Iranian shadow-banking networks. The measure targets those branches specifically. It does not affect the bank’s Egypt operations or its presence in other countries.
Both central banks said they were coordinating their response. Banque Misr’s UAE branches continued operating normally during that period. However, the episode highlighted the dollar-channel risks that bilateral trade can face.
The swap does not eliminate those risks. Dollar-denominated correspondent banking remains the primary settlement route for most large transactions. Compliance obligations tied to dollar flows remain in place. However, the facility strengthens the financial infrastructure available to UAE-Egypt trade. It gives companies a clearer mechanism for managing selected local-currency exposures.
A resilience signal for regional finance
As a market signal, the renewal shows that both governments view local-currency infrastructure as a strategic priority. The dirham-pound swap facility is both a trade tool and a resilience measure. Its practical value will depend on uptake — how many companies actually use it for settlement.
Investors should watch Banque Misr’s UAE operations for normalisation, monitor swap utilisation data as it emerges, and track any further central-bank guidance on eligible transactions and settlement access.
Quick answers
The renewed facility carries a nominal value of AED5 billion, equivalent to approximately US$1.36 billion or EGP69 billion.
The Central Bank of the UAE and the Central Bank of Egypt renewed the agreement for a further five years, signed on 29 September 2026.
The US Treasury proposed restricting Banque Misr’s UAE branches from accessing US correspondent banking services, highlighting dollar-channel risks; the swap provides an alternative local-currency settlement route for eligible bilateral transactions.
