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Saudi Arabia and China Create Swap Agreement for Non-Dollar Trade

South China Morning Post reported Nov. 20 that the Saudi Arabia Monetary Authority central bank and the People’s Bank of China (PBC) had announced agreement on a currency swap of 50 billion yuan for later repayment of 26 billion riyal (the amounts are equivalent to roughly $7 billion).

Neither nation needs currency-stabilization loans; the agreement is evidently to be used in expanding the share of trade between the countries which is in their national currencies. To date, this has not included any sales of oil or oil products, but the Hong Kong-based SCMP implies that this swap may begin such sales.

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