Khaled Mohamed Balama, Governor of the Central Bank of the UAE (CBUAE), and Mamo E. Mihretu, Governor of the National Bank of Ethiopia (NBE), have signed a bilateral currency swap agreement for the UAE Dirham and Ethiopian Birr.
The two parties also entered into two Memoranda of Understanding (MoU) to establish a framework for the use of local currencies in settling cross-border transactions and for linking their payment and messaging systems.
The agreement allows the CBUAE and the NBE to swap local currencies with a nominal value of up to AED 3 billion and ETB 46 billion. This supports the financial and commercial cooperation between the UAE and Ethiopia through the provision of liquidity in local currencies to financial markets, enabling more effective and efficient settlement of cross-border transactions.
Under the first MoU, the CBUAE and the NBE will consolidate efforts to promote the use of their respective currencies in settling transactions between the UAE and Ethiopia. The MoU covers several measures that will facilitate the use of the two countries’ local currencies in the settlement of commercial transactions.
It also encourages financial and banking cooperation through knowledge-sharing, ultimately supporting the development of their respective financial markets whilst facilitating bilateral trade and bolstering direct investment.
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