Daijiworld Media Network - Dubai

Dubai, Apr 9: The United Arab Emirates and Bahrain have signed a currency swap agreement worth AED 20 billion (BHD 2 billion), aimed at strengthening financial cooperation and deepening economic ties between the two nations.

The agreement, formalised during a virtual ceremony, establishes a five-year arrangement linking the UAE Dirham and the Bahraini Dinar. It was signed by Khaled Mohamed Balama and Khalid Humaidan.

Officials said the pact is designed to enhance coordination between the two central banks and promote the use of local currencies in bilateral trade and investment, thereby reducing dependence on foreign currencies.

Balama stated that the agreement reflects a shared commitment to expanding monetary cooperation and building stronger financial frameworks. He noted that encouraging transactions in national currencies would contribute to financial stability and reinforce regional and global partnerships.

Humaidan described the pact as a significant step in advancing cooperation between the financial systems of both countries, adding that it aligns with broader goals of regional financial integration and economic growth.

Currency swap arrangements allow central banks to exchange currencies to ensure liquidity and facilitate smoother cross-border transactions. The agreement is seen as part of ongoing efforts by Gulf nations to enhance economic collaboration and resilience.