The UAE and other Arabian Gulf nations should start to replace cross-border lending and credit lines they have with Europe and the US and boost relations with more-liquid Asian banks, the chief economist of the Dubai International Financial Centre said.
“We can expect European banks to deleverage, reducing their international exposure and credit lines,” Nasser Saidi said in an interview in Dubai on Sunday. “So we’re looking forward to a restructuring of Gulf banking relations. Asian banks are very liquid, especially Chinese banks, so we need to develop credit lines and trade finance with them.”
Europe’s debt crisis that first engulfed Greece and Ireland is threatening to spread to the largest economy in southern Europe. Last week, Italy’s bond yields surged past the 7 percent threshold that prompted Greece, Portugal and Ireland to seek bailouts.
Europe’s fiscal woes have turned into a “global crisis,” IMF deputy managing director Zhu Min said Nov 11. Asia-Pacific officials said they were bracing for a deterioration of Europe’s debt crisis that may push the global economy into a recession.
Emirates NBD, the UAE’s biggest bank, and National Bank of Abu Dhabi are among local lenders that have started inviting clients to open accounts in the yuan, he said.
“We should be using the yuan to finance our trade with China, instead of the dollar,” Saidi said. “We should become the yuan settling and clearing hub for the region.”
The UAE economy, which is expected to expand about 4.5 percent this year, will grow at a slower rate in 2012 as oil prices fall below $100 a barrel, Saidi said. Brent crude, the benchmark for more than half the world’s oil, has averaged about $111 a barrel so far this year and closed at $114.16 on Nov 11.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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