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The growing dominance of Renminbi (RMB) in the Middle East as a strategic currency is a direct result of a convergence in pricing dynamics, counterparty preference and long-dated capital needs, particularly in the fields of energy trade, according to Standard Chartered.
The primary driver behind Renminbi’s growth in the Middle East is the energy settlements in the region with Chinese buyers who are increasingly favouring RMB denomination, the global bank said in a study.
Infrastructure finance, linked to China-backed projects and contractors, along with strategic diversification, further adds RMB optionality alongside the US dollar.
China-Arab trade exceeded $450 billion in 2025, with energy accounting for a substantial portion. This trade linkage has supported growing interest in RMB settlement and financing in select corridors.
“China accounts for over 15% of global trade, yet less than 5% is settled in renminbi (RMB). This divergence signals a structural transition that will shape treasury strategy in the years ahead,” said Karen Ng, Head of China Opening and RMB Internationalisation, Standard Chartered.
RMB growth is increasingly driven by real-economy demand around trade settlement, supply-chain financing and balance-sheet alignment, reinforcing its relevance within multi-currency frameworks, she continued.
“At the same time, payment infrastructure, capital-market connectivity and offshore liquidity have matured, enabling RMB to function at scale across settlement, funding and investment. The question is no longer whether RMB will play a larger role, but how deliberately corporates position their treasury and risk frameworks to engage with it,” Ng added.
In the Middle East, Saudi Arabia and China signed a local currency swap agreement worth 50 billion yuan ($6.93 billion) in 2023, flagging off an increased momentum in bilateral relations between the two nations.
The deal also saw domestic banks in the kingdom authorised to provide RMB services, along with piloting RMB settlement in portions of oil trade.
In the UAE, Dubai has gradually positioned itself as a regional RMB hub. Apart from having a Chinese bank as the RMB clearing bank locally, First Abu Dhabi Bank has also become a direct participant of CIPS in 2025, the operating institution of the Cross-Border Interbank Payment System of China.
RMB dominance
History shows that once a currency becomes embedded across trade, payments and capital markets, its international role tends to persist even through geopolitical tension or policy realignment. The RMB is entering that phase, the report highlighted.
“The strategic consideration is therefore one of alignment – how balance sheets, liquidity frameworks and funding strategies evolve alongside this structural shift. As the underlying conditions mature, the differentiator will lie in positioning. Corporates that align early may unlock advantages in funding efficiency, liquidity flexibility and competitive resilience as RMB usage continues to deepen,” Standard Chartered said.
Yet, the bank also notes that despite RMB’s expanding infrastructure in the region, most Gulf currencies still operate within long-established USD-based monetary frameworks that underpin reserves management, energy pricing and global capital flows.
Within this structure, RMB adoption is progressing selectively in trade and treasury contexts where commercial logic supports diversification and operational efficiency, rather than as a systemic currency shift.
While the UAE and Qatar have shown relatively higher RMB usage in direct trade flows with China and Hong Kong, the overall penetration remains modest relative to total volumes.
(Writing by Bindu Rai, editing by Seban Scaria)
