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China and Saudi Arabia sign 50 billion yuan currency swap deal

EditorPollock Mondal
Published 11/21/2023, 01:09 AM
© Reuters.
CNY/JPY
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BEIJING - In a significant move to strengthen financial ties, the People's Bank of China and the Saudi Central Bank have established a 50 billion yuan ($7.05 billion) currency swap agreement. This strategic pact, announced today, is set for a span of three years with the potential for renewal based on mutual consent. The initiative is designed to boost the use of domestic currencies in bilateral trade between China and Saudi Arabia, further cementing their economic partnership.

This agreement follows a series of collaborative efforts between the two nations aimed at enhancing their economic relationship. In August, Saudi exports to China saw an uptick, reaching SR13.7 billion, indicating a diversification of trade beyond the traditional oil sector. The growing partnership was further emphasized in September through a Memorandum of Understanding that promised advancements in road construction and autonomous vehicle development, which are expected to deepen transport technology links between the countries. Additionally, China granted Approved Destination Status to Saudi Arabia, a move expected to increase group tourism and cultural exchange.

In October, the cooperation extended to the literary domain, with Saudi Arabia's Literature Commission forming an alliance with China’s National Press. This collaboration aims to improve shipping routes and port operations while fostering cultural connections through joint translation projects.

The currency swap agreement underscores a mutual commitment to bolstering financial collaboration and increasing trade investments using local currencies. This step is part of a broader strategy by both nations to diversify their economies and reduce reliance on US dollar transactions in international trade.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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