UAE and Türkiye Sign New Agreements to Strengthen Financial Cooperation and Boost Cross-Border Payments
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The Central Bank of the United Arab Emirates (CBUAE) and the Central Bank of the Republic of Türkiye (CBRT) have signed three major agreements aimed at deepening cooperation in financial technology, payments, and cross-border economic activity.
The agreements include two new memorandums of understanding (MoUs) and a bilateral currency swap arrangement between the UAE dirham and the Turkish lira. Both central banks stated that these steps will support financial and economic collaboration, strengthen bilateral trade, and expand the use of local currencies.
Local Currency Use and Payment System Integration
The first MoU creates a framework for promoting local currency settlement in cross-border transactions. It seeks to expand the use of both the UAE dirham and Turkish lira in trade, remittances, foreign exchange activity and capital account transactions. The central banks will also deepen information exchange to support these goals.
The second MoU focuses on cross-border payments, including the integration of the UAE’s Aani instant payment platform with Türkiye’s FAST system. The integration aims to improve the efficiency of cross-border transactions and promote the use of domestic payment cards. The MoU also encourages collaboration on central bank digital currency (CBDC) development for individuals and institutions, supporting the digital dirham and digital Turkish lira initiatives.
Currency Swap Agreement
The currency swap arrangement, valued at AED 18 billion and TRY 198 billion, is intended to enhance access to local currency liquidity. It will support bilateral trade by enabling more efficient settlement of financial and commercial transactions.
Commitment to Technology and Financial Innovation
The agreements were signed by CBUAE governor Khaled Mohamed Balama and CBRT governor Fatih Karahan. Both leaders highlighted the importance of using local currencies to reduce transaction costs, accelerate settlement times, and strengthen the exchange markets of both countries. They also emphasized the role of advanced technologies, including artificial intelligence, in modernizing financial systems and expanding trade and investment opportunities.
Separately, the UAE’s Securities and Commodities Authority (SCA) and the Dubai Financial Services Authority (DFSA) announced a new MoU to enhance audit oversight and regulatory cooperation.
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