CBUAE, CBRT to promote financial cooperation between UAE, Turkey

The Central Bank of the United Arab Emirates (CBUAE) and the Central Bank of the Republic of Turkey (CBRT) signed a bilateral currency swap agreement between the UAE Dirham (AED) and the Turkish Lira (TRY), in addition to two memorandums of understanding (MoUs): one to promote the use of local currencies (AED - TRY) for cross-border transactions, and another to interlink their payment and messaging systems.

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These agreements aim at promoting financial and economic collaboration and strengthen bilateral trade.

The agreement and MoUs were signed by Khaled Mohamed Balama, Governor of the Central Bank of the UAE and Ph.D. Fatih Karahan, Governor of the Central Bank of the Republic of Türkiye, in the presence of assistant Governors and senior officials from both parties.

The nominal size of the swap agreement is mutually Dhs18 billion and TRY198 billion. It is designed to promote bilateral trade with the aim of further strengthening financial cooperation between the two countries through providing local currency liquidity to financial markets, enabling more effective and efficient settlement of cross-border financial and commercial transactions.

The first MoU aims to establish a framework for promoting the use of the UAE Dirham (AED) and the Turkish Lira (TRY) in settling cross-border transactions. it endeavour to develop the foreign exchange market, facilitate trade and foreign remittances, boost investment, as well as accelerate economic growth and financial stability in both nations.

The MoU specifically includes establishing a local currency settlement scope to expand the use of both currencies in all current and capital accounts transactions, and deepening the exchange of information and experience to achieve shared goals.