CHINA and Saudi Arabia have signed a local- currency swap agreement worth around US$7 billion, deepening their ties as bilateral relations continued to gather momentum. The People’s Bank of China, China’s central bank, and the Saudi Central Bank recently signed a local currency swap agreement worth 50 billion yuan (US$6.93 billion) or 26 billion Saudi riyals, both banks said. The swap agreement, which will be valid for three years and can be extended by mutual agreement, “will help strengthen financial cooperation... expand the use of local currencies... and promote trade and investment,” between the two countries, the statement from China’s central bank said. The Saudi monetary authority said it reflects growing collaboration between the two central banks. China, which has been promoting the yuan’s use in transactions with major energy and commodity exporters, is Saudi Arabia’s biggest trade partner. Saudi Arabia and China have worked to take relations beyond oil ties in recent years, expanding collaboration into areas such as technology. China imported US$65 billion worth of Saudi crude in 2022, according to Chinese customs data, accounting for about 83% of the kingdom’s total exports to the Asian giant. The currency swap deal is the latest sign of strengthening relations between China and Saudi Arabia. Business ties have expanded in recent years, with Saudi Aramco investing billions of dollars in China’s petrochemicals sector and the kingdom trying to attract Chinese tech companies. Saudi Arabia is the world’s largest oil exporter and a pillar of a petrodollar system established in the 1970s that relies on pricing crude exports in the U.S. currency. While maintaining a peg to the dollar, it’s now also seeking to strengthen its relations with crucial trade partners including China as part of an effort to diversify the economy away from petroleum. (SD-Agencies) | 