UAE and Ethiopia Forge Landmark Currency Swap Deal to Boost Trade and Investment
Addis Ababa (16 July 2024) – In a landmark financial collaboration, the Central Bank of the UAE (CBUAE) and the National Bank of Ethiopia (NBE) have signed a bilateral currency swap agreement for the UAE Dirham and Ethiopian Birr. The agreement was formalized by His Excellency Khaled Mohamed Balama, Governor of the CBUAE, and His Excellency Mamo E. Mihretu, Governor of the NBE.
The swap agreement, amounting to AED 3 billion and ETB 46 billion, aims to enhance financial and commercial ties between the UAE and Ethiopia by ensuring liquidity and enabling efficient cross-border transactions. Alongside the swap agreement, two Memoranda of Understanding (MoUs) were signed to establish a framework for using local currencies in cross-border transactions and to integrate payment and messaging systems.
Key Points of the Agreement:
Local Currency Use: The agreement promotes the use of the two countries’ local currencies in settling transactions, facilitating commercial exchanges, and enhancing financial market cooperation.
Payment Platform Integration: The MoUs focus on integrating instant payment systems, national card switches, and messaging systems in compliance with regulatory requirements, fostering cooperation in financial technology and digital currencies.
Economic Cooperation: This initiative is expected to boost economic opportunities, investment, and bilateral trade prospects between the two nations.
Governor Khaled Mohamed Balama emphasized the agreement’s significance in reflecting robust economic cooperation and facilitating trade and investment. “Swapping the currencies of the two countries and using local currencies to settle cross-border transactions and enhance the effectiveness of their instant payment systems, electronic switches, and messaging systems will enhance economic, trade, and investment prospects,” he stated.
Governor Mamo E. Mihretu highlighted the UAE as one of Ethiopia’s largest trading partners and underscored the strategic importance of the arrangement in fostering sustainable development and mutual benefits. “Both the bilateral currency swap agreement and the MoUs signed today are a testament to the shared commitment of the two countries to further deepen our already close bilateral partnership,” he remarked.
This agreement represents a pivotal step in strengthening the economic ties between the UAE and Ethiopia, paving the way for increased trade, investment, and financial collaboration.
For further information, please visit: National Bank of Ethiopia
Source: Addisinsight