<a href="https://www.thenationalnews.com/business/banking/2022/06/07/uae-jordan-and-egypt-central-banks-sign-agreements-for-financial-co-operation/" target="_blank">The UAE Central Bank</a> and the Hong Kong Monetary Authority have agreed to boost co-operation to allow <a href="https://www.thenationalnews.com/business/economy/2023/05/04/gulf-central-banks-raise-interest-rates-as-fed-presses-on/" target="_blank">financial institutions</a> and corporations from the two jurisdictions to step up exchanges and strengthen business ties. The regulators will work together to improve their financial infrastructure, financial market connectivity and virtual asset regulations and developments, the<a href="https://www.thenationalnews.com/business/banking/2021/12/16/uaes-economic-recovery-to-strengthen-in-2022-cbuae-says/" target="_blank"> Central Bank</a> said. The two sides, which held discussions in Abu Dhabi on Monday, are setting up a working group with the support of <a href="https://www.thenationalnews.com/business/banking/uae-banking-system-can-withstand-shocks-of-any-scale-cbuae-says-1.1045619" target="_blank">banking sector </a>stakeholders in both jurisdictions to monitor the progress of the agreed initiatives. During the day-long conference in the UAE capital, they also arranged discussions between their respective innovation centres on joint FinTech development initiatives and knowledge-sharing projects. “We look to build on our central banks’ existing and robust relations,” said Central Bank Governor Khaled Balama. The two sides have discussed ways to boost collaboration across several “important areas”, including opportunities for growth in digitalisation and technological advancements, he said. “We look forward to a long-standing engagement with the HKMA and the Hong Kong financial services sector more broadly, and we will continue collaborating with and exchanging knowledge.” The discussions have provided a “platform” for banks and financial institutions, as well as major corporations in both Hong Kong and the UAE to strengthen business and financial ties, HKMA chief executive Eddie Yue said. “Hong Kong and the UAE are two financial centres sharing many complementary strengths and mutual interests, and there is much room for market participants from these two places to work together and build up the connectivity.” Following the meeting, central bankers joined senior executives from the UAE and Hong Kong banks at a seminar that discussed how businesses in the Emirates could take advantage of Hong Kong to gain access to Asia and mainland markets, as well as investment and capital markets opportunities in China's Greater Bay Area. Executives from banks such as <a href="https://www.thenationalnews.com/business/2023/04/27/first-abu-dhabi-bank-profit-surges-70-in-first-quarter-on-fee-income/" target="_blank">First Abu Dhabi Bank</a>, <a href="https://www.thenationalnews.com/business/banking/2023/05/05/eiic-buys-mubadalas-76-stake-in-abu-dhabi-islamic-bank/" target="_blank">Abu Dhabi Islamic Bank</a>, <a href="https://www.thenationalnews.com/business/banking/2023/04/27/emirates-nbd-first-quarter-profit-more-than-doubles-on-higher-fee-income/" target="_blank">Emirates NBD</a>, the Industrial and Commercial Bank of China, Bank of China, <a href="https://www.thenationalnews.com/business/banking/2023/05/02/hsbc-first-quarter-pre-tax-profit-triples-to-129bn/" target="_blank">HSBC</a> and <a href="https://www.thenationalnews.com/business/banking/2023/02/10/abu-dhabis-fab-not-considering-stanchart-bid-that-would-have-placed-it-in-worlds-top-10/" target="_blank">Standard Chartered</a> also discussed more efficient cross-border payments and trade settlements using the Chinese yuan. The Hong Kong opportunity is compelling and a gateway to China as it operates under a “two markets, one-system structure”, and the yuan can be used for international contracts, given the same structure, panelists said. The <a href="https://www.thenationalnews.com/business/banking/2023/02/23/iraq-to-allow-trade-with-china-to-be-settled-in-yuan/">Chinese currency </a>is gaining importance in international trade as the yuan’s share of global <a href="https://www.thenationalnews.com/business/2023/02/03/why-a-china-gcc-free-trade-agreement-might-be-a-game-changer/">trade</a> settlements continues to grow. The Standard Chartered Renminbi Globalisation Index (RGI), the UK bank’s proprietary measure of international yuan usage, rose 26.6 per cent in 2022, topping the 18.5 per cent growth recorded in 2021, the lender said in a <a href="https://www.thenationalnews.com/business/2023/04/05/chinas-yuan-gains-traction-as-international-trade-settlement-currency/">recent research note</a>. The yuan's increasing popularity in the settlement of international trade deals signifies its growing importance in the global financial system. In 2022, 42.1 trillion yuan ($6.1 trillion) worth of the country’s cross-border payments and receipts were settled in the Chinese currency, up 15 per cent from the previous year, marking the fifth straight annual increase, Chinese news website <a href="https://www.caixinglobal.com/2023-03-01/yuan-popularity-grows-as-go-to-currency-for-international-settlements-with-china-102003380.html">Caixin global</a> reported, citing a February report by the People’s Bank of China. The UAE, the Arab world’s second-largest economy, is home to two onshore financial centres – the Abu Dhabi Global Market and the Dubai International Financial Centre. The Central Bank's efforts to explore new opportunities with regulators in Hong Kong, the world’s fourth-largest financial centre, can help the two financial hubs take advantage of their strengths. “More importantly, given that China is also one of the largest trading partners in the Arab world, the collaboration will drive the UAE’s ambition to be a regional payment and treasury hub that serves neighbouring countries,” the Central Bank said.