UAE and Turkey central banks seek further co-operation after currency swap deal

The governors of the two banking regulators met during Turkish president's visit to Emirates this week

Khaled Balama, Governor of the Central Bank of the UAE, meets his Turkish counterpart Sahap Kavcioglu in Abu Dhabi. Photo: CBUAE

The Central Bank of the UAE and the Central Bank of Turkey are looking to collaborate further following the signing of a bilateral currency swap agreement between the two countries in January.

Khaled Balama, Governor of CBUAE, met with his Turkish counterpart Sahap Kavcioglu in Abu Dhabi during the two-day official visit of Turkey's President Recep Tayyip Erdogan to the Emirates earlier this week.

The governors discussed ways to strengthen the collaboration in the financial and banking sectors, the CBUAE said on Thursday.

“The Central Bank of the UAE is keen to promote collaboration with the Central Bank of the Republic of Turkey on the financial sector and to take forward the economic relations between the two countries,” Mr Balama said.

The bilateral currency swap agreement aims to help improve trade and investment ties between the UAE and Turkey.

The size of the agreement between the UAE dirham and the Turkish lira is Dh18 billion ($4.9bn) and 64bn Turkish lira ($4.7bn), the CBUAE said last month.

A foreign currency swap is an agreement to exchange currency between two parties, in which they swap principal and interest payments on a loan made in one currency for a loan of equal value in another currency.

The pact will remain for three years, with the possibility of an extension through mutual agreement.

The UAE and Turkey signed several agreements and protocols in various fields including health and medical sciences, sea and land transport, advanced industries and technology, climate action and culture during Mr Erdogan's first official trip to the country in almost a decade.

In November, the UAE formed a $10bn fund to support investments in Turkey, following talks between Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, and Mr Erdogan.

The investment fund aims to increase support for the Turkish economy and will focus on strategic sectors such as energy, health and food.