The Central Bank of the UAE's board of directors reviewed the latest renminbi swap agreement which will boost trade and economic cooperation between the UAE and China.

The renminbi is China's currency which is more popularly known as the yuan. The renewal of the agreement will also bolster the volume of trade and industrial exchanges between the two countries and will facilitate exports and imports repayment as well as open new horizons for investors and businessmen.

"This will ultimately have a significant impact on the economy of the GCC the Middle East and North Africa" the central bank board of directors was told.

The eighth board meeting was held under the chairmanship of Khalifa Mohammed Al Kindi and was attended by Khalid Juma Al Majid deputy chairman; Mubarak Rashed Al Mansoori Governor of the central bank; Younis Haji Al Khoori Undersecretary of the UAE Ministry of Finance; and other directors.

In his briefing the governor discussed the results of the talks between the UAE and China on the issue during the recent visit of His Highness Shaikh Mohammed bin Zayed Al Nahyan Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces to the People's Republic of China which resulted in the signing of a memorandum of understanding in this regard as well as the currency swap agreement with China.

Both nations renewed a $5.42 billion currency swap deal during the landmark trip.

The UAE has been included in RMB Qualified Foreign Institutional Investor or RQFI with a quota of 55 billion yuan (Dh31.3 billion). This scheme allows foreigners to invest in China's capital markets. Alp Eke senior economist at National Bank of Abu Dhabi said that the international use of China's renminbi has surged in recent years overtook the Japanese yen and has become the fourth most commonly-used currency globally.

Owing to economic stimulus from the Chinese government the country's economy grew by 7.4 per cent in 2014. China's double-digit growth in the past decade has slowed down as the economy is reaching maturity.

Recently Chinese companies are focusing on a new strategy and are investing overseas mainly focused on North America the Middle East and North Africa. Chinese companies are focused on new sectors such as technology agribusiness and real estate manufacturing.

Renminbi clearing centre

The board also reviewed the latest developments on establishing a renminbi clearing centre in the UAE in order to boost the economic and commercial ties with China and beef up industrial and commercial trade exchange volume between both countries.

This centre will contribute to opening up new channels for investors and businessmen in the UAE and China. It will have a great impact on the economy of the GCC countries and that of the Mena region as well.

Meanwhile the board reviewed a report regarding the latest developments in the Revised Central Bank Law Project and instructed expeditious finalisation of the draft.

A presentation was given on the evaluation of the governance system risks and compliance with the central bank.

The directors reviewed reports presented by the Banking Supervision Department on the levels of compliance of banks and other financial institutions with central bank's regulations and instructed necessary action be taken by banks regarding its compliance with such regulations.

The board reviewed a proposal of the Digital Payments Project team and instructed necessary actions in respect thereof.

They discussed the appointment of a director of an IT management department and directed to take the necessary steps on the appointment of the executing companies for IT projects.

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