The central banks of the United Arab Emirates and India signed on Tuesday a Memorandum of Understanding (MoU) for currency swap to boost trade and investment ties between the two countries, the Indian embassy in Abu Dhabi said in a statement.

"The bilateral currency swap agreement between India and the UAE is expected to reduce the dependency on hard currencies like the U.S. dollar," said the Indian embassy.

The signing was witnessed by UAE Minister of Foreign Affairs and International Cooperation Sheikh Abdullah Bin Zayed Al Nahyan and Indian External Affairs Minister Sushma Swaraj during the ministerial meeting of the 12th session of the UAE-India Joint Commission Meeting held in Abu Dhabi.

"It is also expected to give a push for the local currencies of the two nations and may reduce the impact of volatility in exchange rate arising from the dependency on a third currency," the embassy emphasized, adding it is also expected to reduce the transmission costs arising from exchange rate risk.

The two sides also signed an MoU for joint development cooperation in Africa.

The UAE and India enjoy strong economic relations with a volume of trade exchange that stood at 52 billion U.S. dollars in 2017.