The central banks of Turkey and the United Arab Emirates (UAE) have inked a swap agreement with a nominal size of 18 billion UAE dirhams and TL 64 billion ($4.7 billion), the Central Bank of the Republic of Turkey (CBRT) announced Wednesday.
"The agreement, which is designed to promote bilateral trade with the aim of further strengthening financial cooperation between the two countries, will stand for a period of three years, with the possibility of an extension through mutual agreement," a statement released by the CBRT said.
UAE central bank governor Khaled Mohamed Balama and CBRT Governor Şahap Kavcıoğlu signed the deal on behalf of the respective parties, it added.
"Signing this agreement with the Central Bank of the Republic of Turkey reflects each nation’s desire to enhance bilateral cooperation in financial matters, particularly in the fields of trade and investments between the two countries," Balama was quoted as saying.
Kavcıoğlu, for his part, said that the agreement shows the commitment of the two central banks to further bilateral trade to boost economic relations between the two countries.
Previously in December, reports said that the CBRT was in talks with its counterparts in the UAE and Azerbaijan to secure the currency swap lines.
Turkey and the UAE have recently taken steps to ease badly strained ties. The two countries have seen their ties affected by regional tensions, including the conflict in Libya, where the UAE and Turkey have backed opposing sides in recent years.
Turkey and the UAE signed a total of 10 agreements on energy, the environment, finance and trade during a visit by Abu Dhabi's Crown Prince Mohammed bin Zayed (MBZ) to Ankara in November.
The UAE has also allocated a $10 billion (TL 119.6 billion) fund for direct investment in Turkey, the Abu Dhabi Developmental Holding Company CEO announced.
CBRT's Kavcıoğlu also met UAE officials in Ankara for preliminary talks on the potential swap agreement, and they agreed to improve cooperation.
During this meeting, a cooperation agreement was signed between the Turkish bank and the Emirati counterpart.
The central bank has swap deals with China, Qatar and South Korea worth about $23 billion. They encourage trade in local currencies and boost the central bank's gross reserves.