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UAE, China renew currency swap agreement

Central banks sign MoU to enhance collaboration on central bank digital currency development

The Central Bank of the UAE (CBUAE) and the People’s Bank of China on Tuesday signed an agreement to renew the currency swap between the UAE and China and a memorandum of understanding (MoU) to enhance technical and technological cooperation in the development of central bank digital currencies. The signings will enhance the strategic partnership between the two friendly nations and expand the bilateral relations in the financial and economic fields.

Khaled Mohamed Balama, Governor of CBUAE, and Pan Gongsheng, Governor of the People’s Bank of China, signed the agreement and the MoU in Hong Kong in presence of the UAE Counsel General in Hong Kong, Shaikh Saoud Ali Almualla.

The renewal of the currency swap agreement between the two countries, which has a nominal value of Dh18 billion (equivalent to 35 billion Chinese yuan), for the next five years aims to promote financial and trade cooperation between the UAE and China by facilitating the provision of liquidity in local currency to financial markets for the settlement of cross-border financial and trade transactions in a more effective and efficient manner.

The MoU aims to enhance collaboration central bank digital currency development and strengthen cooperation between CBUAE and the Digital Currency Institute of the People’s Bank of China in the field of financial technology. The MoU will enable the exchange of information on best practices and regulations relating to digital currencies and support the implementation of joint initiatives and projects, including the “mBridge” project which is a multi -central bank digital currencies platform in facilitating cross-border trade payments instantly and securely. The MoU also includes cooperation in training and skills development for specialists on both sides and the exchange of bilateral visits to discuss matters of common interest.

Balama said: “The renewal of the currency swap agreement between our two countries and the memorandum of understanding with our partners in China reflect the depth of the relationship between the UAE and China, embodying the Central Bank’s commitment to solidifying the partnership with our Chinese counterpart in financial, trade and investment fields. We look forward to strengthening cooperation with our partners on innovation and solutions in financial technology including central bank digital currency to support the growth of our economy and society.”