Turkey and the United Arab Emirates have reached a currency swap deal worth $4.74 billion to boost Turkey’s depleted foreign exchange reserves, Turkey’s central bank said on Wednesday.
Under the agreement between their central banks, Turkey and the United Arab Emirates have agreed to exchange 65 billion Turkish liras and 18 billion UAE dirhams for a period of three years, with the possibility of extending the agreement.
The deal aims to help Turkey’s reserves following a series of central bank interventions, which sold foreign currency to prop up the pound amid a currency crisis.
It comes as Turkey and the United Arab Emirates have taken steps to improve relations after years of tension.
Turkey and the United Arab Emirates have found themselves on opposite sides of regional conflicts, including a proxy conflict in Libya and disputes in the Gulf and Eastern Mediterranean.
The powerful Abu Dhabi crown prince visited Ankara last month, making his first official trip to Turkey since 2012 and the highest-level visit by an Emirati official in recent years.
“The signing of this agreement with the Central Bank of the Republic of Turkey reflects each nation’s desire to strengthen bilateral cooperation in financial matters, especially in the areas of trade and investment between the two countries,” said Khaled, head of the central bank of the United Arab Emirates, in a press release. Mohamed Balama as saying after the signing ceremony.
His Turkish counterpart, Sahap Kavcioglu, said: “This agreement demonstrates the commitment of both central banks to deepen bilateral trade in local currencies in order to advance economic and financial relations between our countries.”