Egypt struck a currency swap deal with China. The deal is expected to be worth $2.7 billion and is expected to boost Egypt's bid for $12 billion International Monetary Fund (IMF) loan.

Egypt is required to accumulate $6 billion in outside funding to get the IMF loan. Egyptian Prime Minister Sherif Ismail claimed to have collected 60 percent of the requisite funds as on October 18.

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The agreement is reportedly being processed by the Chinese authorities. However, no details about the terms and conditions or the date of delivery have been provided. Bloomberg quoted Hany Farahat, a Cairo-based senior economist at CI Capital, a subsidiary of Commercial International Bank, saying that the financing may have come at high costs. He added that Egypt needs to muster up requisite funding urgently.

Egypt is currently looking to receive an IMF loan to boost its economy. The country's economy is currently battling with hard currency shortage and rampant inflation. The economic sluggishness is also giving rise to general discontent in the country, raising the fears of political and social instability. China and Egypt have close ties as Beijing has been the country's biggest trading partner since 2013.

Earlier this month, IMF managing director Christine Lagarde had said that the country is very close to obtaining outside funding required by the terms and conditions of $12 billion IMF loan. She pointed out the difference between official foreign exchange rate and gray market price rate. Lagarde said that Egypt is required to address this concern as well as its subsidy policies for supporting its economy.

TagsInternational Monetary Fund, Christine Lagarde, china, Egypt