CAIRO -- Egypt and Russia will sign a debt settlement agreement in Cairo on Thursday, Russian and Egyptian officials said Wednesday.


The agreement offsets many of Egypt's debts to Russia with Russia's debts to Egypt using a subjective assessment of their value, an Egyptian Economy Ministry official said. "It's like an old-fashioned barter deal. You give me a pair of shoes and I give you what we agree is worth the same."


Egypt owes Russia for military hardware it acquired in the 1960s and 1970s and for industrial equipment for Russian-designed factories. Russia owes Egypt for cotton, clothes, citrus fruits and some chemicals. Because of the exchange rate complications it is not easy to say who owes whom the most or how much the debts amount to in dollar terms, the official said.


Russian Foreign Economic Relations Minister Oleg Davydov arrived in Cairo on Tuesday evening and the final negotiations were taking place Wednesday.