China – Saudi Arabia: Signing of a currency swap agreement worth 6.93 billion dollars
China and Saudi Arabia recently signed a local currency exchange agreement worth $6.93 billion, strengthening financial cooperation and promoting trade and investment between the two nations. The three-year swap agreement, extendable mutually, aims to expand the use of local currencies beyond hydrocarbon ties into technology and security.
China, the world’s top energy consumer, and Saudi Arabia, the leading global oil exporter, have been working to broaden their cooperation.
Chinese customs data indicates that in 2022, China imported $65 billion worth of Saudi crude, constituting about 83% of the kingdom’s total exports to China.
The currency exchange agreement, signed between the People’s Bank of China and the Saudi Central Bank, reflects efforts to deepen financial ties and facilitate trade, aligning with China’s commitment to purchase oil and gas in yuan, as pledged by President Xi Jinping.
Despite fluctuations in oil prices, China remains a significant market for Saudi oil.
The deal enhances financial cooperation and local currency use, fostering economic collaboration between Riyadh and Beijing.
The extensive network of currency exchange agreements further solidifies China’s global financial presence.
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Steve Mauri
