DUBAI: The central banks of the UAE and Seychelles signed two memoranda of understanding on Friday to promote the use of local currencies in cross-border financial and commercial transactions, as well as to link payment and messaging systems between the two countries, the Emirates News Agency reported.
The agreements were inked by CBUAE Gov. Khaled Mohammed Balama and CBS Gov. Caroline Abel in Abu Dhabi.
The first MoU aims to establish a framework to promote the use of local currencies in settling bilateral commercial transactions, developing the exchange market, and facilitating bilateral trade and direct investment, remittance settlement, and financial market development.
Under the second MoU, both parties will collaborate and benefit from the services of instant payment platforms, electronic switches, and messaging systems by directly connecting them in accordance with the countries’ regulatory requirements.
This includes connecting the CBUAE’s Instant Payments Platform, which is being developed as part of the Financial Infrastructure Transformation Programme, to the Seychelles’ similar platform to facilitate mutual acceptance of local cards and transaction processing.
Balama said that the signing of the MoU reflects the central bank’s desire to expand its ties with regional and international counterparts in order to strengthen the UAE’s economic and commercial partnerships around the world.
“The use of the two countries’ currencies for cross-border financial and commercial transactions reflects the growing trade, investment, and financial cooperation and contributes to reducing costs and saving time in settling transactions. This helps in developing the foreign exchange market in the UAE dirham and the Seychellois rupee, leading to enhancing trade exchanges, investments, and remittance between the two countries,” he explained.
Abel added: “For small open island economies like Seychelles, the importance of an effective and efficient financial system to facilitate trade cannot be overemphasized. In this regard, the MoUs just signed between our two central banks, guided by the relevant and applicable laws to safeguard the soundness and integrity of our respective financial systems, can assist this endeavor.”
She stated that the agreement to establish the necessary framework for promoting the use of UAE dirhams and Seychelles rupees in cross-border transactions will improve trade relations between stakeholders in both jurisdictions.
“With the Central Bank of Seychelles spearheading efforts to modernize and develop the Seychelles national payment system, in line with the government’s digital economy agenda, the opportunity to collaborate on interlinking our payment and messaging systems will facilitate the processing and settlement of cross-border financial transactions between the two countries,” Abel said.
