HONG KONG (Reuters) – Agricultural Bank of China Ltd (AgBank) will be allowed to clear yuan transactions in Dubai for the United Arab Emirates, sources with direct knowledge of the matter said on Thursday.
China’s central bank is expected to pick a Chinese lender to clear yuan transactions in the UAE by the end of the year.
Dubai acts as the region’s top business centre, handling flows of money and goods to countries in the six-nation Gulf Cooperation Council and beyond.
Officials at China’s AgBank were not immediately available to comment. Officials at the People’s Bank of China declined to immediately comment. The sources declined to be identified ahead of an official announcement.
Qatar opened the region’s first yuan clearing centre in April last year, with Industrial and Commercial Bank of China (ICBC) the clearing bank.
A clearing centre can handle all parts of a currency transaction from when a commitment is made until it is settled, reducing costs and time taken for trading.
(Reporting by Hong Kong newsroom; Editing by Edwina Gibbs)