DUBAI - Emirates NBD, Dubai's largest bank, has started offering yuan accounts in a sign of rapidly growing trade and investment ties between China and the Gulf.
The accounts will help smaller China-affiliated firms trade with the United Arab Emirates and cut their currency risks, the bank said on Wednesday. Investors in yuan assets can also use the accounts, it said.
Emirates NBD joins a handful of other banks, including HSBC and UAE-based Mashreq, in offering yuan accounts in Dubai, the main hub for China's trade with oil-rich countries in the Gulf.
Annual trade between China and the UAE grew fifteen-fold to US$37 billion from 2000 to 2011, Hong Kong Monetary Authority chief executive Norman Chan told China's official Xinhua news agency last month. He said trade could hit $100 billion in 2015.
The vast majority of that business is conducted in dollars, partly because international trade in oil, the Gulf's main export to China, is usually denominated in the US currency.
But Emirates NBD's announcement suggests use of the yuan is starting to move beyond large companies to smaller firms.
Chan, visiting Dubai to promote Hong Kong as a centre for yuan business, estimated about 4 per cent of China-UAE trade was now conducted in yuan, but predicted the proportion would rise into double digits in coming years.