The Central Bank of the UAE signed an agreement with the Arab Monetary Fund to include the UAE dirham as a settlement currency in the Arab regional payments clearing and settlement system called “Buna”.

The UAE dirham will be the first settlement currency on the ‘Buna’ platform for use by financial institutions who meet eligibility criteria, the regulator said in a statement on Thursday.

The AMF rolled out in February Buna, a multi-currency platform, which aims to enable financial institutions, including commercial and central banks, to send and receive cross-border payments. The payments are across the Arab region and beyond, in Arab currencies and key international currencies.

The new system will promote trade and investment between Arab countries. It will also help in the development of financial and banking services and products across the region, according to AMF.

Abu Dhabi-based AMF was founded in 1976 to support its member countries implement various economic and financial reforms and boost growth. Member countries include Jordan, the UAE, Bahrain, Saudi Arabia, Syria, Somalia, Iraq, Oman, Palestine, Kuwait, Lebanon, Libya and Egypt.