(Bloomberg) -- The United Arab Emirates and Turkey appeared to ease longstanding regional tensions further with a rare call between the Persian Gulf state's defacto ruler and President Recep Tayyip Erdogan late on Monday. The lira gained.
It comes after a surprise meeting between the Turkish president and the UAE's national security adviser Sheikh Tahnoun bin Zayed Al Nahyan earlier this month which discussed boosting investments. That seemed to cap years of hostile rhetoric between the two countries which have been locked in proxy conflicts from Libya to Syria for nearly a decade.
UAE officials have spoken about the need to shore up Middle East ties as Washington draws back from the region and seeks to revive nuclear diplomacy with Iran. Abu Dhabi started to hold out the promise of better ties with Turkey that could benefit trade earlier this year at the same time as Erdogan's poll ratings hit all-time lows amid disenchantment with the government's handling of the economy.
The lira rose to the highest level in almost a month and bonds rallied amid speculation the development could help spur foreign investment into Turkey.
The call between Erdogan and Abu Dhabi Crown Prince Sheikh Mohammed Bin Zayed Al Nahyan was “very positive and friendly,” UAE presidential diplomatic adviser Anwar Gargash commented on Twitter on Tuesday. It was in line with the UAE's desire to “build bridges, maximize common goals and work together with friends” to ensure stability and regional prosperity, he wrote.
Just a year ago, Gargash accused Turkey of interfering in Gulf matters, threatening behavior and “colonialist delusions” over Libya.
Read more: Erdogan Meets UAE Royal as Nations Work to End Disputes
Last month's initial outreach by Sheikh Tahnoun was significant because he is also the chairman of International Holding Co., which is one of the UAE's most valuable listed firms. The company is weighing investment opportunities in Turkey, Reuters reported last week.
Tahnoun, who is the brother of Abu Dhabi's crown prince, also chairs ADQ, Abu Dhabi's newest sovereign fund that has amassed an estimated $110 billion in assets since being founded in 2018. It recently joined a funding round for Turkish e-commerce company Trendyol.
Read More: Gulf Reaches Out to Erdogan in Wary Move to Ease Tensions
So far, though, investments have been largely tentative due to longstanding tensions stemming from Turkey's support for the Muslim Brotherhood -- an Islamist political organization viewed as a threat by the UAE's rulers.
Abu Dhabi has also moved to mend ties with Qatar, which has counted on the support from Turkey during a near three-year feud with the UAE, Saudi Arabia, Bahrain and Egypt.
©2021 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
