The Gulf Times - November 4, 2014
Qatar will become the Middle East's first hub for clearing transactions in the Chinese yuan, in a step that could over the long run help Gulf oil exporting countries reduce their dependence on the US dollar. Industrial and Commercial Bank of China's Doha branch has been appointed as the clearing bank for yuan deals in Qatar, China's central bank said on Tuesday. "The signing of the MoU and the appointment of the renminbi clearing bank will increase the strong ties between China and Qatar and position Qatar as the regional centre for renminbi clearing and settlement," the Qatari central bank said. Seeking to promote global use of the yuan, China has in the past two years appointed clearing banks for Taiwan, Singapore, London, Frankfurt, Paris, Luxembourg and Seoul. Hong Kong and Macau had clearing banks earlier; Sydney is expected to join the list under a deal to be signed later this month. A clearing bank can handle all parts of a transaction from when a commitment is made until it is settled; having such a bank can reduce costs and time taken for trading, boosting activity in a financial centre. At present, the Gulf's wealthy oil and gas exporters rely heavily on the US dollar; most of their currencies are pegged to the dollar, and most of their huge foreign currency reserves are denominated in dollars.
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