Turkey and the United Arab Emirates have agreed to a currency swap deal equivalent to $4.74 billion to boost Turkey’s depleted foreign exchange reserves, the Turkish central bank announced Wednesday.
Under the agreement reached between their central banks, Turkey and the UAE agreed to swap 65 billion Turkish lira and 18 billion UAE dirham for a period of three years, with the possibility of extending the deal further.
The agreement aims to help Turkey’s reserves following a series of interventions by the central bank, which sold foreign currency to prop up the lira amid a currency crisis.
It comes as Turkey and the UAE have taken steps to improve relations following years of tensions.
Turkey and the UAE found themselves on opposing sides of regional conflicts, including a proxy conflict in Libya and disputes in the Gulf and the eastern Mediterranean.
Abu Dhabi’s powerful 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.
“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,” a Turkish central bank statement quoted UAE central bank chief Khaled Mohamed Balama as saying after the signing ceremony.
His Turkish counterpart, Sahap Kavcioglu said, “This agreement demonstrates the two central banks’ commitment to deepen bilateral trade in local currencies in order to advance economic and financial relations between our countries.”