UAE and Turkey sign swap agreement

Turkey and the United Arab Emirates recently signed a $5 billion swap deal aimed at boosting Ankara's foreign exchange reserves. This indicates a “thaw” in diplomatic relations between the two countries. 

Turkey, which has a large external debt, again faced a reduction in its foreign exchange reserves. The negative value of real interest rates put strong pressure on the Turkish lira, which lost about 45% of its value last year.

The deal - the latest in a string of swap agreements signed by Turkey with the world's central banks - is a borrowing agreement. While this would boost the country's reserves, it is unlikely that such an operation could have a significant impact on the lira. 

At the same time, the UAE is expected to invest about $10 billion in the Turkish economy, as announced in 2021. At the moment, Abu Dhabi Investment Agency is negotiating with Turkish representatives. 

Turkish President Recep Tayyip Erdogan, who also looks forward to economic cooperation with Egypt and Israel, claimed he plans to visit Saudi Arabia next month.