Yuan to get boost

China Daily (USA) - - FRONT PAGE -

China’s cen­tral bank will launch a yuan-clear­ing ser­vice in the United Arab Emi­rates by the end of the year, strength­en­ing eco­nomic ties with the Mid­dle East.

China’s cen­tral bank has cho­sen Agri­cul­tural Bank of China Ltd to clear yuan trans­ac­tions in Dubai for the United Arab Emi­rates, sources with di­rect knowl­edge of the mat­ter said on Thurs­day.

ABC of­fi­cials were not im­me­di­ately avail­able to com­ment. Of­fi­cials at the Peo­ple’s Bank of China de­clined to com­ment. The sources de­clined to be iden­ti­fied ahead of an of­fi­cial an­nounce­ment.

Choos­ing a Chi­nese lender to clear yuan trans­ac­tions in the UAE is seen as a move to strengthen grow­ing eco­nomic ties be­tween China and the Mid­dle East.

Qatar opened the re­gion’s first yuan clear­ing cen­ter in April last year, with In­dus­trial and Com­mer­cial Bank of China Ltd be­com­ing the clear­ing bank.

Aclear­ing cen­ter can han­dle all parts of a cur­rency trans­ac­tion from when a com­mit­ment is made un­til it is set­tled, re­duc­ing costs and time taken for trad­ing.

A clear­ing bank in theUAE could have a big im­pact on trade and in­vest­ment in the Gulf re­gion be­cause Dubai acts as the re­gion’s top business cen­ter, han­dling flows of money and goods to coun­tries in the six-na­tion Gulf Co­op­er­a­tion Coun­cil and be­yond.

“In this re­gion ev­ery­one thinks of Dubai as the hub for the whole of the Mid­dle East,” said Fang Min, se­nior ex­ec­u­tive of­fi­cer of the agri­cul­tural bank.

“From an eco­nomic and fi­nan­cial cen­ter point of view, Dubai is the most ap­pro­pri­ate (place) to set up an off­shore yuan mar­ket.”

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