{"id":82245,"date":"2023-11-21T00:00:00","date_gmt":"2023-11-21T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2023\/11\/21\/we-just-signed-a-local-currency-swap-with-china\/"},"modified":"2023-11-21T00:00:00","modified_gmt":"2023-11-21T00:00:00","slug":"we-just-signed-a-local-currency-swap-with-china","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2023\/11\/21\/we-just-signed-a-local-currency-swap-with-china\/","title":{"rendered":"We just signed a local currency swap with China"},"content":{"rendered":"

Saudi Arabia and China signed a bilateral local currency swap agreement worth CNY 50 <\/strong>bn (c. SAR 26 bn)<\/strong>, statements by two countries\u2019 central banks read (here<\/a> and here<\/a>). The move comes as Riyadh and Beijing look to take ties to the next left \u2014 and reflect their shared interest in partially diversifying their non-oil trade away from the greenback. <\/p>\n

Neither the Saudi Arabian Monetary Authority (SAMA) nor Beijing\u2019s central bank were loquacious <\/strong>about the three-year swap. <\/strong>SAMA said only that the agreement \u201creflects closer ties between the two banks in fields of common interest.\u201d The People\u2019s Bank of China said separately that the swap will \u201chelp strengthen financial cooperation\u201d and \u201cfacilitate more convenient trade and investment\u201d between the two countries.<\/p>\n

Why this matters: <\/strong>China is our largest trade partner, with bilateral trade<\/a> between the two countries hitting USD 87.3 bn in 2021. The move reflects Crown Prince Mohamed bin Salman\u2019s emphasis on building deeper economic ties with China, where we are already one of that country\u2019s top oil suppliers. We\u2019re also shifting away from the USD as the de-facto currency for oil payments. Business ties with Beijing have grown in recent years as we\u2019ve worked to attract investment in the Kingdom by Chinese tech companies and oil giant Aramco has poured bns of USD<\/a> into China\u2019s petrochemicals sectors. <\/p>\n

It\u2019s not only economy: <\/strong>Riyadh and Beijing have shared geopolitical interests, with China helping broker<\/a> a historic reestablishment of ties between Riyadh and Tehran earlier this year. Beijing was also the starting point of a visit yesterday by a Middle East delegation led by Foreign Minister Faisal bin Farhan Al Saud for talks on a ceasefire in Gaza.<\/p>\n

An easier \u201cI do?\u201d to BRICS? <\/strong>Saudi was one of six countries<\/a> invited in August to join the BRICS group of nations. We\u2019re expected to join in January with allies including Egypt and the UAE. <\/p>\n

What\u2019s on Beijing\u2019s mind: <\/strong>\u201cChina seems to be using swap lines in a very different way to the US,\" Weitseng Chen, associate professor at the National University of Singapore told Reuters.
\u201c[China] uses it as a credit line, so it's on a constant basis, instead of a one-time, one-off thing during a financial crisis,\u201d Chen said. <\/p>\n

The story also got ink from: Reuters<\/a> | Bloomberg<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

The move comes as the two countries look beyond the USD<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2571],"tags":[366,27,10,368,367],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-82245","post","type-post","status-publish","format-standard","hentry","category-economy","tag-currency-swap","tag-economy","tag-enterpriseam-ksa","tag-peoples-bank-of-china","tag-saudi-arabian-monetary-authority","wpautop","entry"],"acf":{"mongo_id":"9b8082e7-720b-427e-993c-7350ff527c55","is_powered_by":false,"story_type":"1","photo_url":"","photo_position":"above","homepage_title":"","full_issue_title":"KSA, China sign local currency swap worth CNY 50 bn","related_issue":[82242],"teaser":"The move comes as the two countries look beyond the USD","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/1\/.93587cc8-f992-423a-b37b-73b33599b0a3.mp3"},"yoast_head":"\nWe just signed a local currency swap with China - 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