UAE & China strengthen ties with currency swap renewal & CBDC partnership

In a significant development within the BRICS economic alliance, the United Arab Emirates (UAE) and China have reinforced their economic collaboration through the renewal of a currency swap agreement and the signing of a Central Bank Digital Currency (CBDC) partnership. As key players within the BRICS bloc, the agreements mark a crucial step toward enhancing local currency promotion and advancing digital finance initiatives.

Central banks seal the deal with 18 billion dirhams & 35 billion yuan currency swap

The Central Bank of the UAE and the People’s Bank of China officially sealed the agreements, with CBUAE governor Khaled Mohamed Balama and People's Bank of China governor Pan Gongsheng signing the documents. The currency swap, valued at 18 billion dirhams (approximately 35 billion yuan), aims to bolster relations and bilateral cooperation between the two nations over the next five years. The move reflects a concerted effort to strengthen economic ties and emphasises cooperation in economic and digital finance domains.

UAE's strategic move ahead of official BRICS entry in 2024

The UAE, having accepted the BRICS alliance's invitation in August, is strategically positioning itself for enhanced relations before its official entry into the bloc in 2024. The proactive approach is expected to contribute to the nation's success within the alliance during the early months of next year. With a focus on economic and digital finance fields, the partnership also raises questions about the potential inclusion of digital currencies, such as China's successful digital Yuan CBDC, as integral components within the BRICS framework.

In conclusion, the strengthened economic ties between the UAE and China underscore the growing significance of the BRICS alliance on the global stage, with both nations actively contributing to the bloc's economic and digital finance agendas.