China and Saudi Arabia have signed a local-currency swap agreement worth around $7 billion, deepening their ties as countries across the Middle East look to shift more of their non-oil trade away from the dollar, reports Bloomberg. The two countries’ central banks have agreed on a three-year deal for a maximum of RMB 50 billion or 26 billion riyals, according to their separate statements on Monday. China, which has been promoting the yuan’s use in transactions with major energy and commodity exporters, is Saudi Arabia’s biggest trade partner.
The swap arrangement will “help strengthen financial cooperation” and “facilitate more convenient trade and investment” between the two countries, the People’s Bank of China said in a statement. The Saudi central bank made similar comments.
The deal is the latest sign of strengthening relations between Beijing and Riyadh. Though Saudi Arabia has long been one of China’s main suppliers of oil, 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.