BY YOHANNES FENTAHUN
United Arab Emirates (UAE) and Ethiopia have forged economic partnership as the two rubber-stamped a currency swap deal.
In a move signaling deepening economic cooperation between the two nations, the central banks of the United Arab Emirates (UAE) and Ethiopia signed a bilateral currency swap agreement valued at up to 3 billion dirham (approximately USD816.79 million).
This agreement represents a significant milestone in the growing economic relationship between the UAE and Ethiopia, offering a range of benefits for both countries.
The currency swap agreement is expected to facilitate smoother trade and investment flows between the two countries. By reducing reliance on third-party currencies like the US dollar, businesses can enjoy lower transaction costs and increased predictability in exchange rates. This will make it easier for Ethiopian exporters to access UAE markets and vice versa, fostering economic growth and job creation in both nations.
The agreement also contributes to greater economic stability and resilience for both countries. By providing access to each other's currencies, the agreement acts as a safety net during periods of volatility in global financial markets. This is particularly important for Ethiopia, which is currently facing economic challenges due to various factors.
The agreement also underscores the commitment of both countries to strengthening their financial infrastructure. The use of local currencies promotes financial inclusion and reduces reliance on foreign aid, ultimately contributing to long-term economic development.
The currency swap agreement signifies a strategic partnership between the UAE and Ethiopia. This move aligns with UAE's Vision 2021, which aims to build a diversified and sustainable economy, and Ethiopia's ambition to become a middle-income country by 2025.
The agreement goes beyond simply facilitating trade. It lays the groundwork for a broader economic partnership between the two countries. The UAE can leverage its expertise and infrastructure to support Ethiopia's development, while Ethiopia offers a vast market with untapped potential for UAE investors.
This currency swap agreement is a positive development for both the UAE and Ethiopia. It promises to foster stronger economic ties, promote stability and resilience, and pave the way for greater collaboration in the future. As the two nations continue to deepen their economic engagement, this agreement serves as a testament to their shared commitment to mutual prosperity and growth, according to the National Bank of Ethiopia.