This initiative is expected to strengthen economic, trade, and investment relations between the two countries. Khaled Mohamed Balama, Governor of the Central Bank of the UAE, highlighted the benefits of using local currencies to settle transactions, noting that it would bolster economic ties and financial stability. Mamo Mihretu, Governor of the National Bank of Ethiopia, emphasized that the UAE is one of Ethiopia’s largest trading partners and a major source of foreign investment. He pointed out that the currency swap arrangement provides essential funding opportunities for Ethiopia, helping to diversify its financial instruments and support the growing volume of trade and investment transactions.
In addition to the currency swap agreement, the UAE and Ethiopia also signed preliminary agreements to develop a framework for using local currencies in cross-border transactions and to integrate their payment and messaging systems. This includes the integration of the UAE’s UAESWITCH and Ethiopia’s ETHSWITCH, facilitating smoother and faster transactions. The cooperation extends to financial technology and the development of central bank digital currencies, aiming to enhance the technological infrastructure and capabilities of both nations’ financial sectors.
This strategic move reflects the UAE's broader efforts to strengthen its economic partnerships and enhance its financial influence globally. The currency swap agreement with Ethiopia is expected to have a positive impact on trade and investment flows, further cementing the strong economic ties between the two countries.
