UAE and Syria Sign Memorandum of Understanding Between Their Central Banks

The Central Bank of the United Arab Emirates and the Central Bank of Syria signed a memorandum of understanding covering the development of payment systems, monetary policy, and cash management. Payment systems refer to the infrastructure that transfers funds between banks and facilitates daily transactions between individuals and companies.

The memorandum also encompasses financial technology (fintech) integration, technical capacity building, climate-related financial risks, sustainable finance, and credit information systems. Credit information systems refer to databases that collect customers' credit histories and help banks assess lending risks.

Furthermore, it covers the exchange of best practices in licensing, regulatory enforcement, and consumer protection, areas that define how banking licenses are granted and how rules are applied to non-compliant institutions. From the UAE side, the agreement was signed by Central Bank Governor Khaled Mohamed Balama, and from the Syrian side, by Central Bank Governor Mohammad Safwat Abdul Hamid Raslan.

Balama described the memorandum as an important step in sharing expertise and knowledge between the two central banks. Memorandums of understanding typically serve as an initial, non-binding framework that paves the way for broader executive agreements between the two parties.

What do these terms mean?

Memorandum of Understanding (MOU): A legally non-binding agreement outlining areas of cooperation between two parties, commonly used as a first step toward broader agreements.

Monetary Policy: Central bank decisions regarding interest rates and the money supply aimed at controlling inflation and stabilizing the currency.

Financial Technology (Fintech): Companies and applications that provide online financial services such as payments, money transfers, and digital lending.