The Central Bank of the UAE and the Central Bank of the Republic of Turkey have signed an agreement to renew the currency swap between the Emirati dirham and the Turkish lira, along with two memoranda of understanding. The first memorandum aims to strengthen cooperation in the use of local currencies for settling cross-border financial and commercial transactions, while the second focuses on connecting payment systems and financial messaging to enhance financial collaboration and boost trade and economic relations between the two friendly nations.
The agreements were signed by His Excellency Khaled Mohamed Balama, Governor of the Central Bank of the UAE, and Dr. Fahrettin Karahan, Governor of the Central Bank of Turkey, in the presence of assistant governors and senior officials from both sides.
The renewed currency swap agreement, with a nominal value of 18 billion dirhams and 198 billion Turkish lira, aims to foster financial and trade cooperation between the two countries by providing liquidity in local currencies for financial and commercial transactions across borders more effectively and efficiently.
The first memorandum seeks to establish a framework for enhancing the use of the UAE dirham and the Turkish lira in cross-border transactions, contributing to the development of the exchange market, facilitating trade and foreign remittance settlements, increasing investments, and promoting economic growth and stability in both countries. It includes the establishment of a local currency settlement mechanism to broaden the usage of both currencies in current account transactions and capital account operations, as well as enhancing the sharing of information and expertise to meet common interests and goals.
The second memorandum aims to facilitate cross-border payment transactions and the use of local payment cards in line with the regulatory and supervisory requirements of both nations. It also includes the exchange of expertise in developing a central bank digital currency platform for individuals and institutions for cross-border payments. This memorandum encompasses the integration of the instant payment platform (Anni) with its Turkish counterpart (Fast) for more efficient processing of cross-border financial transactions, along with connecting the electronic systems of both countries.
Khaled Balama emphasized that the agreements signed today reflect the commitment of the Central Bank of the UAE and the Central Bank of Turkey to collaborate in support of the two friendly countries’ efforts to elevate their strategic partnership to new heights in financial sectors, fintech, and cross-border digital payments. The use of both currencies in financial and commercial transactions across borders will help reduce costs and time in transaction settlements, thereby developing the exchange market for these currencies and boosting trade and financial remittances.
Dr. Fahrettin Karahan stated that the signing of these agreements illustrates the mutual desire to develop financial cooperation and enhance bilateral trade using local currencies to promote economic relations and achieve comprehensive development goals. He noted that the agreements provide a significant opportunity to facilitate trade and investment relations among stakeholders from both countries, and he looks forward to exchanging bilateral experiences in payments and fintech, deepening the adoption of modern technologies in the financial sector to serve the economic and financial interests of both nations.