UAE-China ink multibillion-dollar deals as ties grow
The United Arab Emirates and China are major trade partners and have strengthened cooperation in both finance and energy in recent months.
China and the United Arab Emirates extended their currency-swap agreement on Tuesday and a Chinese bank listed bonds on a Dubai stock exchange a day earlier, as UAE-China business ties continue to strengthen.
The Central Bank of the UAE and the People’s Bank of China renewed the $4.9 billion agreement for five years with the purpose of facilitating financial and trade cooperation. The two also signed a memorandum of understanding on enhancing technological cooperation with regard to the development of central bank digital currencies, the UAE Central Bank said in a press release.
A currency swap is an exchange of interest and principal in one currency for the same amount in another. Countries may engage in currency-swap agreements so their businesses operating overseas can obtain a more favorable loan rate in the local currency than if they borrowed from a local bank, according to Investopedia.
The UAE and China first signed a currency-swap agreement in 2012 and have since renewed it several times.
