A swap agreement worth 198 billion lira was signed between the Central Bank of the Republic of Turkey (CBRT) and the Central Bank of the UAE.

In addition to this agreement, two memorandums of understanding were signed between the two banks: one aimed at encouraging the use of local currencies in cross-border transactions, and the other aimed at connecting payment and messaging systems.

These agreements aim to develop financial and economic cooperation and strengthen bilateral trade.

The agreements and memorandums of understanding were signed by Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan and UAE Central Bank Governor Khaled Mohamed Balama at a ceremony attended by senior officials from both parties.

The nominal amount of the swap agreement was determined as 198 billion lira and 18 billion AED respectively.

The agreement aims to promote bilateral trade to further strengthen financial cooperation between the two countries by providing local currency liquidity to financial markets and enabling more effective and efficient cross-border financial and commercial transactions.

The first memorandum of understanding aims to create a framework that will encourage the use of Turkish Lira and AED in cross-border payment transactions.

In this context, the aim is to develop the foreign exchange market in both countries, facilitate commercial and foreign payments, increase investments, and accelerate economic growth and financial stability.

The memorandum of understanding envisages expanding the use of both currencies in all transactions in current and capital accounts, particularly by establishing a local currency swap mechanism, and deepening the sharing of knowledge and experience to achieve common goals.

The second memorandum of understanding aims to facilitate cross-border payment transactions in line with regulatory and supervisory requirements in both countries and to support the use of local payment cards. It also encourages the sharing of knowledge and expertise on the development of central bank digital currency platforms for wholesale and retail payments.

The memorandum of understanding, which envisages the integration of the FAST system in Türkiye and the instant payment platform in the UAE, aims to increase the efficiency of cross-border financial transactions.

In this context, it is envisaged to connect the electronic systems and transition infrastructures in the two countries to ensure interoperability and operational efficiency.

Central Bank of the Republic of Turkey (CBRT) Governor Fatih Karahan, whose comments were included in the statement, said, "These agreements reflect the joint commitment of both parties to advance financial cooperation and develop bilateral trade using local currencies, and support the goal of establishing more comprehensive economic relations and sustainable development goals."

Karahan emphasized that the agreements offer new opportunities to facilitate trade and investment relations between stakeholders in both countries, saying, "We look forward to sharing expertise and experiences in payments and financial technology and accelerating the adoption of advanced technologies, including artificial intelligence, in the financial sector in a way that serves the economic and financial interests of both countries."

Khaled Mohamed Balama, Governor of the Central Bank of the UAE, also stated that the agreements reflect the commitment of the two banks to work together to further strengthen the strategic partnership between the countries, particularly in the areas of finance, financial technology and cross-border digital payments.

Balama noted: "The use of local currencies in cross-border financial and commercial transactions not only helps reduce costs and shorten transaction times, but also contributes to the development of foreign exchange markets for both currencies. This, in turn, increases trade volumes and financial transfers."