Saudi Payment Disruptions Test UAE–Saudi Trade Ties
Businesses that rely on Dubai as their regional hub for serving Saudi Arabia have been among the hardest hit.
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Financial transfers to the United Arab Emirates from Saudi Arabia are being affected, indicating that increasing political tensions between the region’s two largest economies are starting to influence cross-border business and trade.
Several executives and people familiar with the matter said that payments from Saudi entities to UAE-based bank accounts, particularly those based in Dubai, have been either delayed or returned since May, without an official explanation.
The occurrence has deeply affected the businesses that specifically rely on Dubai as a regional hub to serve Saudi Arabia.
A Dubai-based executive told the Financial Times that three separate payments from a long-standing Saudi customer have been blocked by Saudi Banks since mid-May. He further revealed that payments were typically put on hold for a week before being returned. Notably, the Saudi client’s attempts to transfer funds personally had failed.
“They are saying there’s a block from the Saudi central bank and they can’t really give more detail than that,” the executive told the newspaper.
Responding to the claim, Saudi Arabia’s central bank denied imposing any restrictions targeting any specific country. “There are no direct restrictions on specific countries; banks apply risk-based measures consistently across all transactions to safeguard the integrity of the financial system,” the central bank said in a statement.
Meanwhile, an Emirati official said that the UAE’s economy ministry had yet to receive complaints from private-sector companies regarding unusual delays. “The UAE and Saudi Arabia maintain deep and longstanding economic and commercial ties,” the official said.
Given the two countries’ historically close commercial ties, an annual bilateral trade volume of $20 billion is at stake.
