Türkiye–UAE currency swap deal expected to boost Gulf investments

The currency swap agreement signed between the central banks of Türkiye and the United Arab Emirates (UAE) is set to strengthen Türkiye’s digital banking sector and attract fresh investment from the Gulf.

Signed on Thursday, the deal includes three agreements between the Central Bank of Türkiye (CBRT) and the Central Bank of the UAE (CBUAE). It establishes a bilateral swap between the Turkish lira and the UAE dirham, promotes the use of national currencies in cross-border transactions, and integrates the two countries’ payment and messaging systems. The swap has a nominal value of 198 billion Turkish lira ($4.7 billion) and 18 billion dirhams ($4.9 billion).

Economists say the agreement will accelerate the adoption of digital banking in Türkiye and further integrate its financial sector into the global system. İsmet Demirkol, an economist at Istanbul’s Bahçeşehir University and founder of consultancy firm Pariterium, noted that the deal is likely to attract investment in digital technologies and banking innovation. He added that future swap agreements could also encourage investments in green energy, including wind, solar, and hydrogen.

Filiz Eryılmaz, associate professor of economics at Bursa Uludağ University, said the swap would bolster the CBRT’s foreign exchange reserves and support financial stability.

Experts highlight that the deal is a positive step for both trade and capital flows, facilitating greater Gulf investment into Türkiye.

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