UAE bank begins offering accounts in Yuan
- Published on Thursday, 07 February 2013 14:34
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The step will also help individual investors and small businesses to hedge against the risk of the yuan’s appreciation against the US dollar.
“The enormous increase in UAE’s bilateral trade with China and the resultant fast-growing Chinese-related business and resident population in the country have turned the focus significantly on the world’s second-largest economy,” said Suvo Sarkar, the general manager of retail banking at Emirates NBD.
Emirates NBD’s move is a reflection of the tightening in commercial ties between the UAE and China in recent years.
Two-way trade has advanced fivefold over the past decade from US$3.12 billion (Dh11.46bn) in 2002 to $15.6bn last year, according to data from the Ministry of Foreign Trade.
Banks operating in Dubai including HSBC, Standard Chartered and Mashreq, have begun offering business banking services denominated in Yuan. Emirates NBD, Union National Bank and National Bank of Abu Dhabi have opened offices on the Chinese mainland.
Last March, Emirates NBD became the first bank in the Middle East to issue a bond sale denominated in Yuan.
The bank’s plans also link into a wider bid by Dubai to become an offshore trading centre for the currency.
There is no question that the UAE has been actively looking to diversify in trading relationships, which have historically been heavily dependent on the UK. Since the 1980s, the UAE has been very successful at building a global trading hub focussing given its strategic location between Asia and Europe. Only in the past decade has the country made a significant push into Asia as well as Central Asia. Encouraging trading in Yuan will only benefit the country in the long run.