Egypt is still struggling with its dollar shortage. It has sought to face the shortage through a series of decisions, the last of which entailed floating the exchange rate on Nov. 3. But the crisis persists, thus pushing Egypt to seek another currency that would reduce demand for the dollar. The choice has fallen on the Chinese yuan in the country’s battle against the dollar.

On Dec. 6, China’s Central Bank, the People’s Bank of China, signed a three-year currency swap bilateral agreement with the Central Bank of Egypt worth 18 billion yuan ($2.62 billion).

In a statement Dec. 6, the Egyptian Central Bank noted that the three-year agreement can be extended with the approval of both Chinese and Egyptian parties, adding that it is beneficial for both countries. The statement underlines the strong relations between Egypt and China and notes China’s support for Egypt’s economic reform program.

On Oct. 1, the Chinese yuan was added to the International Monetary Fund's (IMF) basket of currencies that make up the Special Drawing Right (SDR). The basket is used to calculate the average global exchange rate on a daily basis, which measures the value of the SDR of the 188 members that are participants in the SDR Department.