In a blow to US, Turkey and China ditch US Dollar
Under a swap agreement signed between the central banks of Turkey and China, the Turkish state lender Vakifbank and Chinese private lender ICBC Turkey made their first transactions in local currency, Chinese yuan.
"As Vakifbank, we are taking concrete steps to finance foreign trade in local currency, which is one of the strategic priorities of our economy management," Abdi Serdar Ustunsalih, the Vakifbank CEO, said in a statement.
"We provide our customers engaging in foreign trade with China with the opportunity to make their payments in Chinese yuan," he said.
Turkey and China realized over $21 billion trade volume in 2019, Ustunsalih noted, adding that there is a serious potential in trading in local currencies.
"I believe that the diversification of the currencies used in foreign trade will positively contribute to a more stable foreign trade and investment environment," he also said.
Also expressing his pleasure to cooperate with ICBC group and ICBC Turkey, Ustunsalih said under the goodwill agreement signed with the Group in 2017, Vakifbank has been cooperating in different areas such as bilateral loans, syndication, trade financing, treasury, and other debt capital market transactions.
ICBC Turkey is the first Chinese bank that started operations in Turkey by acquiring majority shares of a local bank in May 2015.
The swap agreement was signed between Turkey's Central Bank and the People’s Bank of China in 2019.
Under the deal, commercial banks will be able to expand their product range corresponding to international trade and finance activities with a strategy based on the swap agreement.