(Bloomberg) -- Egypt signed a local-currency swap agreement worth around $1.4 billion with the United Arab Emirates, as the North African nation seeks ways to ease an economic crisis.

The deal will allow for the exchange of local currencies between the countries’ central banks up to 5 billion dirhams and 42 billion Egyptian pounds, according to a joint statement.

Egypt is battling its worst foreign-currency squeeze in years. It’s devalued the pound three times since early 2022, allowing it to lose almost half its value against the dollar. Yet many investors believe it will have to weaken it again. The International Monetary Fund is calling on Egyptian authorities to allow for true flexibility in the currency before it lends more money under a $3 billion rescue program.

On Wednesday, Egypt’s central bank said it was discussing a currency-exchange agreement with China and would consider issuing yuan-denominated bonds.

©2023 Bloomberg L.P.