Abu dhabi: The central banks of Trkiye and the United Arab Emirates signed three agreements, including a swap deal, to deepen financial cooperation and enhance trade and economic ties between the two countries.
According to Anadolu Agency, the deals include a bilateral currency swap agreement between the Turkish lira and the UAE's dirham, alongside two memoranda of understanding. One aims to promote the use of local currencies for cross-border transactions, while the other focuses on interlinking their payment and messaging systems.
The Turkish Central Bank stated that these agreements aim to promote financial and economic collaboration and strengthen bilateral trade. The swap agreement involves 198 billion Turkish liras ($4.76 billion) and 18 billion UAE dirhams ($4.9 billion), designed to provide local currency liquidity to financial markets and enable more efficient settlement of cross-border transactions.
The first pact sets a framework for encouraging the use of the UAE's dirham and Turkish lira in cross-border settlements, aiming to expand the foreign currency market and facilitate international commerce and remittances. It calls for enhanced information sharing and the creation of a local currency settlement scope to boost both currencies' usage.
The second agreement focuses on increasing the use of domestic payment cards and easing cross-border transactions while adhering to both countries' regulatory requirements. It promotes knowledge sharing in developing central bank digital currency platforms and describes the integration of the UAE's Aani and Trkiye's FAST systems to improve cross-border transaction efficiency.
Fatih Karahan, the Turkish Central Bank governor, emphasized that these agreements reflect both parties' commitment to advancing financial cooperation and fostering bilateral trade using local currencies. Khaled Mohamed Balama, governor of the UAE Central Bank, highlighted the agreements' role in further strengthening the strategic partnership between the two nations, especially in finance, financial technology, and cross-border digital payments.