China launches two systems of exchange rates with the currencies of Saudi Arabia, UAE

[yota691]

China launches two systems of exchange rates with the currencies of Saudi Arabia, UAE

BEIJING (Reuters)

September 23, 2016

Forex trading platform operator said in China today, Friday, that Beijing is working to establish a system of direct exchange rate between the yuan and the Saudi riyal and UAE dirham.

China's foreign exchange system, said in a statement, published today, that China also will establish a system of direct exchange rate between the yuan and the UAE Dirham.

The statement pointed out that both systems will enter into force from September 26 / September. 

 

[yota691]

Enter into force as of today

Direct exchange system between the dirham and the yuan strengthens trade

Chinese currency 100 yuan category (archival)

Posted: Monday September 26, 2016

Hossam Abdul Nabi (Dubai)

The whole financial experts that the entry of the private decision to establish direct system of exchange rates between the yuan and the UAE dirham, will contribute to the promotion of trade between the two countries, especially since China is the second largest trading partner of the state, while the UAE is an outlet for about 60% of the total Chinese exports to the region.

According to Ministry of Economy data, total trade between the two countries amounted to $ 54.8 billion in 2015, exceeding the total foreign non-oil trade, including free trade areas, $ 47.5 billion during the same year.

 

Experts said that in light of the establishment of a system of direct exchange rates and the entry into force of the decision, with effect from today (Monday) will be settled payments process without changing the dirham or the yuan to the dollar and then the contrary, what means reducing settlement stages and the creation of an abundance of non-currency conversion as signs to the possibility of revising the currency imported goods pricing, stressing that the adoption of the yuan as the currency of international reserves as of next October will make the Chinese currency comes in the leading position in terms of importance in the list of currencies in international reserves, and the euro from its position as the second displace the importance of international currencies.

 

The experts pointed out that accelerate business operations between the UAE and China will benefit Chinese companies operating in the UAE, where there are more than four thousand Chinese companies operating in the state and about 250 Chinese commercial agency and more than 5451 Chinese registered trademark, excluded at the same time to fall Emirates its decision to link its currency to the US dollar after the Chinese currency, the adoption of the currency of international reserves starting next October, especially since that decision has proven successful in times of global crises, while the dollar was under great pressure and, consequently, a change in the policy is difficult, especially since the dollar in a stronger position At present.

Promote trade

The Osama Hamza Al Rahma, CEO of the group of banking institutions and financial conversion, that the presence of the Chinese currency as a currency directly settle trade transactions opens up more room for the promotion of trade between the UAE and China, saying that in light of the establishment of a system of direct exchange rates will be settled payments without changing the DRAM process or the yuan to the dollar and then the contrary, what means reducing the stages of settlement and the creation of an abundance of non-Currency converter is pointing to the possibility of revising the currency imported goods pricing.

And identified a number of sectors that could benefit from the establishment of the direct system of exchange rates between the dirham and the yuan, he said that the most important import and re-export sectors, ruling out at the same time to affect the decision of the International Monetary Fund to include the Chinese currency to the SDR basket of currencies has to become the yuan currency international reserves, as of October this year, the status of the US dollar as the currency of international reserves and the first favorite, especially since most of the deposits and cash in China is still in dollars through the purchase of bonds and US assets, as well as that America is a preferred trading partner for China.

 

According to Al Rahma, that the yuan could become as well as the international reserve currency basket for diversification in order to reduce risk, ruling out at the same time to have the yuan a reserve currency alternative to the major currencies, as the Japanese yen was not a competitor than before, despite economic growth and increased business transactions between Japan and many other countries.

 

And the impact of the establishment of the direct system of exchange rates between the dirham and the yuan on the foreign exchange market and remittances, Al Rahma answered, that there is no clear vision of the impact of the decision so far because most customers are still using the US dollar in remittances and when traveling, in addition to the volume of remittances from individuals from the community China is still limited, pointing out that most of the transfers of DRAM to be the yuan in trade transactions and goes in large part to the banks.

Pricing goods

For his part, Mohamed said on Al Ansari, Executive Director, Al Ansari Exchange President, the establishment of direct system of exchange rates between the yuan and the DRAM, will undoubtedly facilitate trade exchange between the two countries through non-recourse to the UAE currency conversion into dollars and then from the dollar to the yuan China, where it will be the conversion of DRAM directly to the Chinese currency, and vice versa, noting that the complete settlement processes directly accelerate the time of business processes, makes Chinese goods has evaluated more acceptable prices, owing to provide the cost of conversion to a third currency.

He ruled Ansari, be a private decision to establish the new system a direct impact on the financial and foreign exchange remittance market in the country, pointing out that the decision may encourage Chinese companies investing in the state to increase commercial operations with China is reflected in the business.

He ruled Ansari, be replaced linking the dirham and the dollar to a basket of world currencies after the start of the Chinese currency, the adoption of the currency of international reserves in October, pointing out that the peg with the dollar proved successful in times of global crises, while the dollar was under great pressure and, consequently, the change that politics is difficult, especially since the dollar in a stronger position at the moment.

Standard broker

In turn, confirmed Mohammed Jamal, an economic adviser and head of the Gene company to trade precious metals, the Beijing agreement to establish a force to direct system of exchange rates between the yuan and the UAE dirham and the entry of the decision Monday comes undoubtedly in favor of the UAE economy and the Gulf economies in general is in order trade operations without relying on the dollar as a standard intermediary between the dirham and the Chinese currency, explaining that the process of trade was done in the past through the dollar adoption as a standard broker even if the direct conversion to the investor of the dirham to the yuan, and then, the liberalization of the central rear binding process It will be channeled to the benefit of trade. He pointed out that trade between the UAE and China Activity after the adoption of the direct exchange rate regime will benefit the UAE currency and gives it strength. He attributed to the fact that the price of foreign exchange depends on the balance of trade between the two words into account the volume of exports and imports each side, and in the case of increasing trade exchange between the UAE and China will increase demand for DRAM means the exchange of business more efficiently for the benefit of the two countries, stressing that there are several sectors will benefit from the establishment of direct system of exchange rates is the most important trade and shipping, tourism, due to the acceptance of the dirham and the yuan in sales outlets in both countries.

With regard to the Chinese currency, the emergence of international reserve currency, said Jamal, it's better for the Gulf States distribution of its investments and operations of trade international currencies editor balanced with the dollar.

He stated that the reliance on the dollar alone in trade operations increases the risk in light of fluctuations that may adversely affect the economic relations between the Gulf and American countries, and expected that the Chinese currency, topping a leading position in terms of importance in the list of international reserves of currencies may displace the euro from its position as the second currency international importance.

And the likelihood of decline in Gulf states for their dollar pegs to become linked to a basket of international currencies including the Chinese yuan, Jamal, said that such a decision must take into account many considerations, whether economic, political or security, but in economic terms only, the inclusion of most of the currencies in the process trade gives emancipation and reliability of less than connectivity in a single currency, stressing that the UAE has taken proactive to take advantage of the growing importance of the Chinese currency moves, and the first was that the state has become the headquarters of the Bank of the settlement of Chinese work in the region, which means strengthening the state's position to become an important financial center, connecting East and West, especially since most of the Chinese goods are given to the UAE first and then re-exported to countries in the region.

[Seabee]

Very interestingly put. I wonder what means for the Dinar in the future?

[blueskyline]

This Deal Is here Deal is Huge .

 

[blueskyline]

3 hours ago, blueskyline said:

This Deal Is here Deal is Huge .

 

My apologies .  This is a Big Deal . It seems China will now purchase oil from the Saudis in local currency and not the USD ? No more Petro Dollar or far less of ?

Edited September 28, 2016 by blueskyline