BY MOHAMMAD SHOEB
DOHA: A Chinese currency clearance and settlement centre was opened here yesterday which will enable businesses in Qatar and the Middle East to conduct trade with China directly in Renminbi (RMB) replacing the US dollar or any other third currency.
The RMB clearing centre will save a lot of money for traders as they will no longer be required to buy dollars or other international currency and pay commissions to intermediaries for converting them into RNB.
The first Renminbi (RMB) clearing centre in the Middle East region was inaugurated by the Prime Minister and Interior Minister H E Sheikh Abdullah bin Nasser bin Khalifa Al Thani.The push to internationalise the Chinese currency has been picked up by international financial centres in other parts of the world, such as Singapore, London, Hong Kong, Luxemburg, Toronto, but Qatar has become the first in the region to have a RMB clearing centre.
The centre is expected to increase financial connectivity between China, Southwest Asia and the Mena region and increase opportunity to expand trade and investment between China, Qatar and the region.
It will provide access to China’s onshore RMB and foreign exchange markets to local financial institutions fostering cross-border use of the Renminbi in the region.
Banks will be able to expand investment portfolios of financial services and products through facilitation and issuance of financial instruments such as the trading of debt market products, interest rate and commodity derivative products denominated in the RMB.
The Industrial and Commercial Bank of China (lCBC) has been designated by the People’s Bank of China (PBC, central bank) as the settlement bank for Qatar.
Present at the ceremony were H E Sheikh Abdullah bin Saoud Al Thani, Governor, Qatar Central Bank (QCB); Minister of Finance H E Ali Sherif Al Emadi; Jiang Jianquing, Chairman, ICBC, and dignitaries from Qatar and China. Sheikh Abdullah said: “The launch of the region’s first RMB clearing centre in Doha creates the necessary platform to realise the full potential of Qatar’s and the region’s trade relationship with China.
“It will facilitate greater cross-border RMB investment and financing by businesses and promote greater trade and economic links between China and the region, paving the way for better financial co-operation and enhancing pre-eminence of Qatar as the financial hub in Mena.”
The centre follows the signing of the memorandum of understanding last November with China’s central bank by Sheikh Abdullah during the official visit of Emir H H Sheikh Tamim bin Hamad Al Thani to China.
QCB and PBC also signed a currency swap agreement, which laid the foundations for Qatar to become the first centre for RMB clearing and settlement in the region.
The agreements were signed in Beijing in the presence of the Emir and Chinese President Xi Jinping.
Jiang said: “The first RMB clearing centre in the region will open further the gateway and opportunities for trade between China and the Middle East and Africa. Looking to the future, it will improve the ease of transactions between companies in the region and China by allowing them to settle their trade directly in RMB, drawing increased trade through Qatar and boosting bilateral and economic collaborations between both countries.”
Trade between Qatar and China continues to increase, having more than tripled between 2008 and 2013 to about $11.5bn (about QR41.9bn). Chinese companies have become active partners in the Qatar market, with 13 companies operating in addition to 181 joint ventures with Qatari partners.
The Peninsula
