Gulf countries finding taste for China’s yuan
China’s currency, the yuan, is becoming increasingly popular among Gulf countries in trade transactions because of China’s growing economic influence and uncertainties surrounding other major currencies, according to a banking expert.
Farooq Siddiqi, managing director for transaction banking at Standard Chartered, was quoted in the Arab Times as saying that GCC companies are these days willing to hedge against the US dollar by using the yuan.
“We are seeing increasing interest from the GCC in renminbi,” Siddiqi was quoted as saying. “That’s mainly due to increasing trade between both sides and the need to hedge against dollar exposure.”
“The Gulf states are shifting their focus towards Asia and Africa, away from the historic trade partners of US.”
According to the report, more than nine percent of global trade with China, worth around US$330 billion, is denominated in yuan, with the figure expected to reach $1 trillion in 2020 at a growth rate of 15 per cent. .
China consumes more energy products from the Gulf than any other country and the biggest exporter to the region, reaching about $60 billion in 2011.
This year, China signed a three-year currency swap agreement with the UAE worth 35 billion yuan ($5.5 billion). In the first 11 months of 2011, trade between the two countries rose 38 per cent to $32 billion, with Chinese exports to UAE making up $24.3 billion.
China’s currency, the yuan, is becoming increasingly popular among Gulf countries in trade transactions because of China’s growing economic influence and uncertainties surrounding other major currencies, according to a banking expert. Farooq Siddiqi, managing director for transaction banking at Standard Chartered, was quoted in the Arab Times as saying that GCC companies are these days willing to hedge against the US dollar by using the yuan. “We are seeing increasing interest from the GCC in renminbi,” Siddiqi was quoted as saying. “That’s mainly due to increasing trade between both sides and the need to hedge against dollar exposure.” “The Gulf...
China’s currency, the yuan, is becoming increasingly popular among Gulf countries in trade transactions because of China’s growing economic influence and uncertainties surrounding other major currencies, according to a banking expert.
Farooq Siddiqi, managing director for transaction banking at Standard Chartered, was quoted in the Arab Times as saying that GCC companies are these days willing to hedge against the US dollar by using the yuan.
“We are seeing increasing interest from the GCC in renminbi,” Siddiqi was quoted as saying. “That’s mainly due to increasing trade between both sides and the need to hedge against dollar exposure.”
“The Gulf states are shifting their focus towards Asia and Africa, away from the historic trade partners of US.”
According to the report, more than nine percent of global trade with China, worth around US$330 billion, is denominated in yuan, with the figure expected to reach $1 trillion in 2020 at a growth rate of 15 per cent. .
China consumes more energy products from the Gulf than any other country and the biggest exporter to the region, reaching about $60 billion in 2011.
This year, China signed a three-year currency swap agreement with the UAE worth 35 billion yuan ($5.5 billion). In the first 11 months of 2011, trade between the two countries rose 38 per cent to $32 billion, with Chinese exports to UAE making up $24.3 billion.
