Vantage | Why Saudi is trading American dollars for Chinese Yuan

Saudi Arabia is deepening ties with China. On Monday, they signed a deal. To trade in their native currencies, and sideline the dollar. The deal is worth almost seven billion dollars. It is valid for three years. This is a currency swap agreement, a financial contract between the central banks of China and Saudi Arabia. Henceforth, China's central bank will maintain a reserve of the Saudi riyal, and the Saudi central bank will keep China's yuan. So, when a payment needs to be made, these banks will just use the native currencies. The Saudis will settle bills in yuan, and…