Egypt joined a group of Arab countries to study reducing dependence on the dollar in its international trade dealings, especially importing food commodities and raw materials from China, India and Russia.
Egypt is the largest importer of wheat in the world. The choice of the yuan, the rupee and the ruble is given great attention. According to Egyptian Minister of Supply Ali Moselhi: “We are seriously considering importing from countries by adopting their local currencies and the Egyptian pound, and we have crossed a large part of this long track with China, India and Russia.” However, he made it clear, in press statements on Saturday, that no deal had been implemented in anything other than the green currency until now.
Egypt is facing a foreign currency shortage crisis, the worst in years, which intensified at the beginning of last year with the US Federal Reserve raising interest rates and the outbreak of the Russian-Ukrainian war, which led to the exit of more than $22 billion in hot money. Reaching an agreement with the International Monetary Fund, in December, to obtain direct financing of $3 billion, within credit facilities exceeding $9 billion, has not succeeded in returning foreign investments to the stock markets in the country so far.
The Minister of Supply mainly talked about importing food commodities, as Egypt has a strategic reserve of wheat sufficient for 2.6 months, vegetable oils for 4.3 months, sugar for 4 months, rice for 3.7 months, and meat for 1.7 months.
The UAE and India, which represent one of its main partners, are also studying ways to increase non-oil intra-trade in their local currencies. And the UAE Minister of State for Foreign Trade, Thani Al-Zeyoudi, stated in an interview with Bloomberg TV, in December, that his country is in an early stage of discussions with India regarding the use of the dirham and the rupee in their trade exchange, which “will be limited only to non-oil trade.”
For its part, Riyadh informed Beijing, at the beginning of this year, that it is open to discussions about trade exchange between Saudi Arabia and China by adopting currencies other than the dollar. This was preceded, during December, by Saudi Finance Minister Muhammad Al-Jadaan’s statement that the kingdom was “open to discussions regarding trade in currencies besides the US dollar.”
In turn, Iraq, OPEC’s second largest oil producer, intends to pay for private sector imports from China in yuan and inject foreign currency into the financial system to help ease pressure on the dinar.
According to a statement issued in February, the CBI announced that it would provide the yuan to local lenders to deal with their counterparts in China. It will also secure Chinese currency to the final beneficiaries through some special central bank accounts.
This article was originally published by RT.