6651
UAE To Activate $5.7b China Currency Swap
World Economy

UAE To Activate $5.7b China Currency Swap

The central banks of the United Arab Emirates and China aim to activate their 35 billion yuan ($5.7 billion) currency swap agreement soon, a senior UAE central bank official said on Tuesday.
The agreement, designed to facilitate two-way trade and investment, was originally signed in January 2012, permitting the central banks to swap their currencies if needed, gulfbusiness reported on Tuesday.
But private bankers believe there has been little if any use of the arrangement in practice. Most of the UAE’s trade is conducted in dollars and the vast bulk of its foreign reserves are in dollars; its currency is pegged to the U.S. currency.
Last month Qatar, a rival financial center in the Persian Gulf, took a step towards overtaking the UAE in building financial ties with China. It signed a similar 35 billion yuan swap deal with Beijing and said it would become the Middle East’s first hub for clearing transactions in the Chinese currency.
Industrial and Commercial Bank of China’s Doha branch was appointed as the clearing bank for yuan deals in Qatar.
Saif al-Shamsi, assistant governor for monetary policy and financial stability at the UAE central bank, said on Tuesday that his institution and the Chinese central bank were now eager to “activate” their swap arrangement.
“Right now we are in the process of activation of the swap. It has not been activated yet. There is an official communication,” he told reporters, adding that the process could be completed in coming months.
Shamsi said a yuan clearing centre might also be set up in the UAE, though he did not elaborate.
He said he would not comment on the idea of making the yuan part of the UAE’s foreign reserves, but asked whether the central bank was diversifying into other currencies, he said: “No, it’s 99 per cent dollar.”
The UAE central bank’s foreign currency assets totalled Dhs327.6 billion ($89.3 billion) in July.

Short URL : http://goo.gl/nkllXd

You can also read ...

An expanding trade war threatens to squeeze incomes.
The untold story of the world economy—so far at least—is the...
Russia has been seeking ways of decreasing dependence  on the US currency.
One of Russia’s largest banks, VTB is seeking to decrease the...
Uncertainty abounds in Malaysia, where a two-month-old government is only starting to give  a clearer picture of economic policy.
For Southeast Asia's biggest economies, 2018 wasn't supposed...
PwC Says Australian Firms Deliberately Going Broke
Companies that deliberately fail are costing the Australian...
Asian Stocks Retreat, European Shares Mixed
Asian stocks closed lower on Monday as investors digested the...
Turkey Budget Deficit Expands
Turkey’s central government budget balance recorded a deficit...
Chinese Premier Li Keqiang (C) shakes hands with Jean-Claude Juncker (L) and Donald Tusk after the meeting in Beijing on Monday.
China could open its economy if it wished, European Commission...
Experts Say China Can Cope With Uncertain H2
China is confident it can cope with a more uncertain second...

Trending

Googleplus