UAE & Bahrain Central Banks Sign USD 5.4 Billion Currency Swap
The five-year swap line equals AED 20 billion and enables dirham–dinar exchanges for local currency trade settlement.
The Central Bank of the United Arab Emirates and the Central Bank of Bahrain have signed a currency swap agreement valued at AED 20 billion (USD 5.4 billion), establishing a five-year swap line between the UAE dirham and the Bahraini dinar.
The agreement was signed on April 8th, 2026 by Khaled Mohamed Balama, Governor of the UAE central bank, and Khalid Humaidan, Governor of the Central Bank of Bahrain, during a virtual ceremony.
Under the arrangement, each central bank will have access to the other’s local currency liquidity for authorised operations, including the settlement of eligible cross-border transactions.
Currency swap agreements provide reciprocal liquidity between central banks and are commonly used to facilitate trade and financial flows in local currencies, reducing reliance on the US dollar.
The swap line creates a framework for using dirhams and dinars directly in transactions between United Arab Emirates and Bahrain over a defined amount and timeframe.
Both institutions said the agreement is intended to strengthen monetary cooperation, support cross-border payment systems and promote the use of local currencies in trade and investment.
