Standard Chartered introduces business transactions for Chinese currency with the UAE dirham

The introduction of a direct business link of the Chinese currency with the UAE dirham and Saudi Riyal was done on Thursday by Standard Chartered Bank (Chine) Co Ltd. This is the first ever direct trading market –makers for the Chinese currency in the foreign exchange market.
From the 26th of September, China had formed a direct business transaction relation also known as RMB between the currencies of the two nations.
According to the head of Standard Chartered Bank’s Financial Markets UAE, Sami Mahfouz, the bank has been well established in the Middle East and handles issues in regards to providing reliable products, rendering solutions covering cash trade, foreign exchange and commodities.
Mahfouz went on to explain that “China has over the years become the second largest business associate with the UAE while Saudi Arabia remains to be the largest. The RMB will aid in faster business transactions as opposed to the dirham and riyal. It will also be cost effective, promote bilateral trade and investments between the two countries and also promoting the RMB to be internationally recognized. It is of great pleasure to be part of this great achievement which will enhance trading, investments and financing in the Middle East.”
Ryan Song, Executive Vice President and Head of Global Markets for China at HSBC commented that “direct business transactions between the two currencies will help widen the existing trade between China and the Middle East, a very important region for China to rejuvenate its dominant Silk Road through its Belt and Road initiative.”
He added that over the few years, the use of the RMB has been on the increase across the Middle East region. According to reports in 2015, the UAE use of the RMB stood at 75% of all payments with China and Hong Kong, which is an increment of 52% from the previous year.
Comments from currency experts proves that having direct trading pairs does not only reduce foreign exchange costs, it also fastens business transactions and also improve on the economic relations with the countries involved.

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