The Central Bank of the UAE (CBUAE) and the National Bank of Ethiopia (NBE) have signed a significant bilateral currency swap agreement between the UAE dirham and the Ethiopian birr.
The agreement, which allows for the swap of local currencies with a nominal value of up to Dh3 billion and ETB 46 billion, is expected to provide liquidity to financial markets, thereby facilitating more efficient settlement of cross-border transactions.
The two parties have also entered into two Memoranda of Understanding (MoU). The first MoU establishes a framework for the use of local currencies in settling cross-border transactions. It includes measures to promote the use of the UAE dirham and Ethiopian birr in commercial transactions, supporting financial market development and enhancing bilateral trade and investment.
The second MoU focuses on cooperation in payment platform services and electronic switches. It aims to interlink instant payment systems, national card switches (UAESWITCH and ETHSWITCH), and messaging systems, while also exploring cooperation in financial technology and central bank digital currencies.
“The bilateral currency swap agreement and the MoUs signed today reflect the robust economic cooperation between the UAE and Ethiopia, specifically in the areas of trade and investment,” said Khaled Mohamed Balama, Governor of the CBUAE.
Mamo E. Mihretu, Governor of the NBE, added, “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, so as to facilitate sustainable development and a prosperous future.”
