UAE and Bahrain sign currency swap agreement worth AED 20 billion/Image: WAM

The United Arab Emirates and Bahrain have signed a currency swap agreement worth AED 20 billion (BHD 2 billion), marking a step towards closer financial cooperation and stronger economic ties between the two countries. The agreement, signed during a virtual ceremony, brings together the UAE Dirham (AED) and the Bahraini Dinar (BHD) under a five-year arrangement. It was formalised by Khaled Mohamed Balama, Governor of the Central Bank of the UAE, and Khalid Humaidan, Governor of the Central Bank of Bahrain. The deal is aimed at strengthening coordination between the two central banks while also supporting trade and investment flows by encouraging the use of local currencies. Khaled Mohamed Balama said the agreement reflects a shared commitment to deepen financial and monetary cooperation. He noted that it supports efforts to expand the use of national currencies in transactions and helps build stronger frameworks for collaboration between central banks. According to him, the move will contribute to financial stability and strengthen both regional and international partnerships. Khalid Humaidan described the agreement as a reflection of the close relationship between the UAE and Bahrain. He said it marks an important step in advancing cooperation between the two countries’ financial systems and supports broader goals of regional financial integration. He added that the agreement is expected to support economic growth while reinforcing financial stability in both nations. Currency swap agreements allow central banks to exchange currencies, helping ensure liquidity and making cross-border trade smoother. Officials see this move as part of wider efforts to strengthen economic cooperation in the region.