Morocco and the United Arab Emirates are strengthening financial ties with the signing of two memoranda of understanding between their central banks. The agreements, signed on October 3 at the Central Bank of the United Arab Emirates headquarters in Abu Dhabi, aim to enhance cooperation in banking supervision, Islamic finance, payment systems, and financial technology. The MoUs were signed by Bank Al-Maghrib Governor Abdellatif Jouahri and Central Bank of the United Arab Emirates Governor Khaled Mohamed Balama.
The first agreement focuses on regulatory and supervisory matters, with both central banks agreeing to exchange supervisory information related to banks and financial institutions. They will also coordinate on supervisory practices and regulations, exchange expertise, and work to strengthen institutional capacity. This cooperation aims to improve the efficiency of cross-border transactions between Morocco and the UAE.
In Islamic finance, the two institutions will coordinate among Shariah governance bodies to develop cross-border Shariah-compliant financing. This includes trade finance and infrastructure investment, reflecting a growing interest in Islamic finance as a viable option for funding development projects. The cooperation in Islamic finance is expected to open up new opportunities for both countries.
The second MoU focuses on payment systems and financial messaging. The central banks will explore ways to interlink instant payment platforms, national card switches, and financial messaging systems in Morocco and the UAE. This initiative aims to facilitate the processing and settlement of cross-border transactions and enable the mutual acceptance of domestic payment cards.
The agreement also covers cooperation on central bank digital currencies, including the exchange of expertise in developing retail and wholesale central bank digital currencies. The two institutions will explore the potential use of central bank digital currencies in cross-border payments between Morocco and the UAE, which could significantly enhance the efficiency of financial transactions.
Bank Al-Maghrib Governor Abdellatif Jouahri emphasized the importance of the agreements, describing them as a significant step in strengthening cooperation between the two central banks. Jouahri highlighted the potential for developing cross-border financial transactions and accelerating their processing.
Central Bank of the United Arab Emirates Governor Khaled Mohamed Balama also welcomed the agreements, stating that they reflect the UAE's commitment to expanding financial cooperation with Morocco. Balama expressed optimism about exchanging supervisory expertise, developing Islamic finance solutions, and strengthening links between payment systems.
Key points
- The agreements aim to strengthen financial cooperation between Morocco and the UAE.
- The MoUs cover cooperation in banking supervision, Islamic finance, and payment systems.
- The agreements also explore the use of central bank digital currencies in cross-border payments.
