2024-01-20 14:32:19
Recent economic developments demonstrate the sustained desire of the Chine to internationalize the yuan, its national currency. These efforts span various sectors, including currency exchanges, electronic money, cross-border transactions and digital currency. This trend is intensifying mainly within Gulf Stateswhere the Chine actively strengthens its economic presence.
On November 28, 2023, a significant agreement was reached between the People’s Bank of China and the Central Bank of the United Arab Emirates. Worth US$4.89 billion over five years, this renewal of the currency swap agreement illustrates the growing engagement between these two entities. Equally notable, the two banks signed a memorandum of understanding aimed at intensifying their collaboration in the development of digital currency, a key step towards global adoption of yuan.
At the same time, the financial market Dubaiin partnership with the Nasdaq Dubai and the Shanghai Stock Exchange, established a memorandum of understanding covering various areas of digital financial cooperation. This enhanced collaboration between the Chinese and UAE financial markets promises to further stimulate trade and investment between the two regions.
The evolution of currency exchanges between Chine and the United Arab Emiratesstarted in 2012, reached a significant milestone in March 2023 with the first-ever purchase of liquefied natural gas in yuan. This transaction marks a concrete step towards the use of the yuan in trade between the two partners.
On November 20, 2023, another major agreement was reached between the People’s Bank of China and theSaudi Monetary Authority. Worth $6.98 billion over three years, this currency swap strengthens financial ties between Chine and theSaudi Arabia. Additionally, Saudi companies have been listed on the Stock Exchange Hong Konghighlighting the growing integration of Chinese and Saudi financial markets.
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