The UAE and Qatar lead the Middle East in use of the yuan in direct payments with China and Hong Kong, according to the financial messaging firm Swift.
Last year, the UAE’s use of renminbi or yuan comprised 74 per cent of all payments by value to China and Hong Kong, up by 52 per cent from 2014.
In Qatar, it accounted for 60 per cent, up more than twofold in the same period.
The yuan’s use has been boosted by a number of agreements signed last year.
In 2015, Qatar became the first country in the Middle East to host a yuan clearing and settlement facility, after a deal between the Qatar Central Bank and the People’s Bank of China.
In December, the UAE and China signed a memorandum of understanding to set up a clearing centre for the Chinese currency in the country.
“Use of the renminbi has been rising across the Middle East region over the last few years,” said Sido Bestani, the head of Middle East, Turkey and Africa at Swift. “We anticipate these and similar efforts [renminbi clearing houses in Qatar and UAE] will continue to drive renminbi adoption across the region.”
China also renewed its renminbi swap agreement last year with the UAE, in its latest move to internationalise the currency.
The agreement allows the UAE Central Bank to provide up to 35 billion yuan (Dh19.5bn) to settle bilateral trades.
Last month, the Dubai Gold and Commodities Exchange, the derivatives exchange, opened a trade in yuan currency futures, priced in US dollars.
The yuan last month held the position as the fifth most active currency for global payments by value, accounting for 2.31 per cent of all payments. That is an increase from 2.28 per cent market share in November, according to Swift.
The yuan’s payments’ value rose 15.92 per cent last month from November, while all payments currencies increased by 14.43 per cent last month from November.
dalsaadi@thenational.ae
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