DUBAI (Reuters) - Standard Chartered (STAN.L) said on Thursday it had started direct trading between the Chinese yuan, Saudi Arabia’s riyal and the UAE’s dirham, making it one of the first market-makers to trade those currency pairs in China’s interbank market.
Last week, the operator of China’s foreign exchange trading platform said it had agreed to establish direct trading for the two pairs, starting on Sept. 26. Previously, trade occurred indirectly through third currencies such as the U.S. dollar.
Trading goods between the Gulf and China has grown rapidly in the last few years, although it has dropped off recently because of the weaker oil price. China is the UAE’s second-largest trading partner and is Saudi Arabia’s largest partner.
Financial trading links are also growing.
Sources told Reuters last month that Agricultural Bank of China (601288.SS) would be allowed to clear yuan transactions in Dubai for the United Arab Emirates, making the bank the first Chinese lender in the UAE to do so.
Reporting by Tom Arnold; Editing by Andrew Torchia and Louise Ireland