Egypt is considering implementing trade exchange operations with Russia, Turkey, and some African countries through barter system, in an attempt to reduce pressure on the foreign currency, according to Asharq Bloomberg on Sunday.
Bartering is an exchange process between two parties in which the act of trading goods or services is without the use of money. In essence, bartering involves the provision of one good or service by one party in return for another good or service from another party.
Last week, Egypt requested to buy tea through bartering for another commodity, the Kenyan Treasury Njuguna Ndongo told Bloomberg.
He also pointed out that the statements of the Kenyan side, conveyed by the Egyptian ambassador, were incorrectly interpreted as bartering being an agreement between the two countries, while in fact, the bartering takes place mostly between merchants.
The official said that the mechanism of trade exchange by barter has not yet occurred at the official government level with any country, but studies are currently being conducted for its application and implementation with Russia, Turkey, India and some African countries.
He also added that the mechanism is being studied by the Central Bank of Egypt (CBE), as it’s hard to implement it without the approval of the bank because it is the one that gives instructions and permits to deal.
He explained that the CBE would be the guarantor of the swap operations for both parties. The government and the private sector will also be the regulating body for barter trade operations.
