Enhancing trade and economic ties between Turkey and the United Arab Emirates (UAE), the Central Banks of both nations have announced that they have recently signed a cooperation agreement and two Memorandums of Understanding.
The signed agreement will see a bilateral currency swap of the Turkish Lira and the UAE Dirham. Amounting to around $4.9 billion USD each, Turkey will send 198 billion Turkish Lira, while the UAE will send 18 billion UAE Dirham.
The Central Bank of Turkey (CBRT) said in a written statement posted on their website: “These agreements aim at promoting financial and economic collaboration and strengthening bilateral trade.”
The other two agreements between the two banks are Memorandums of Understanding, including: promoting the use of local currencies when making cross-border transactions, and interlinking of banking payment and messaging systems.
The first MoU promises to establish using Turkish Lira or UAE Dirham when making cross-border payments. The agreement aims to expand the foreign currency market – leading to more stability and economic progress for both countries.
The second MoU aims to increase the usage of domestic payment cards, making it easier for transactions to be made between both countries. By sharing data and integrating Turkey’s FAST system with the UAE’s Instant Payment Platform, cross-border payments would be faster and more affective.
The Governor of the Turkish Central Bank, Fatih Karahan, noted that the signed agreements reflect a shared commitment of both countries to advance financial cooperation. He said: “The agreements open up new opportunities to facilitate trade and investment relations.”
Khaled Mohamed Balama, the Governor of the UAE Central Bank echoed the same response as Karahan. Balama noted that both banks could work together in areas such as finance, financial technology, and cross-border digital payments. Balama said: “The agreements support the efforts of both nations to strengthen their strategic partnership to new heights.”
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