The Central Bank of the United Arab Emirates (CBUAE) and the Central Bank of Bahrain (CBB) have signed a currency swap agreement between the UAE Dirham (AED) and the Bahraini Dinar (BHD) to strengthen bilateral financial cooperation.
The agreement, signed during a virtual ceremony, carries a nominal value of $5.45 billion (AED 20 billion, BHD 2 billion) and a tenor of five years.
It is designed to enhance liquidity management and facilitate cross-border trade and investment between the two countries.
The agreement was formalized by Khaled Mohamed Balama, Governor of the CBUAE, and Khalid Humaidan, Governor of the CBB, underscoring the deepening monetary collaboration between the UAE and Bahrain.
Strengthening financial cooperation
Khaled Mohamed Balama said that the initiative reaffirms the shared commitment of both nations to expanding financial and monetary cooperation while strengthening trade and investment ties.
Balama noted that the agreement also supports efforts to promote the use of local currencies in bilateral transactions, contributing to enhanced financial stability and the development of stronger cooperation frameworks between central banks. The move is expected to deepen both regional and international financial partnerships.
Khalid Humaidan highlighted that the agreement reflects the strong and longstanding ties between the leadership of Bahrain and the UAE, describing it as a key milestone in their bilateral relationship.
Humaidan added that the currency swap arrangement will further enhance cooperation between the two central banks and support regional financial integration, while also contributing to economic growth and financial stability in both countries.
Currency swap agreements enable central banks to exchange currencies to support liquidity needs and stabilize financial systems, particularly during periods of market volatility.
The UAE–Bahrain agreement is expected to facilitate smoother trade flows, reduce reliance on foreign currencies, and strengthen resilience across both economies.
The initiative aligns with broader regional efforts to enhance monetary cooperation, promote economic integration, and support sustainable growth across the Gulf region.
