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#USDCNH dropped ~250pip 6.4100 to 6.3850 yday on prospect of Saudi Arabia SA receiving oil payment from China in #CNY instead of #USD
▪️ Pricing Ccy is different from Invoice/Settlement Ccy - SA can receive CNY but oil may still be priced in $$
1/5
wsj.com/articles/saudi…
▪️ Pricing Ccy is different from Invoice/Settlement Ccy - SA can receive CNY but oil may still be priced in $$
1/5
wsj.com/articles/saudi…
▪️ China oil imports from SA ~$45bn pa, ~1.75 mbpd
▪️ What can SA do with CNY received
1. Pay in CNY for Chinese imports/services
2. Diversify FX Reserves into CNY away from USD
2a. Invest back into China onshore say CGBs
+ve for CNY internationalization
[SAMA FXReserves $420bn]
▪️ What can SA do with CNY received
1. Pay in CNY for Chinese imports/services
2. Diversify FX Reserves into CNY away from USD
2a. Invest back into China onshore say CGBs
+ve for CNY internationalization
[SAMA FXReserves $420bn]
