Saudi Arabia Blocking Money Transfers to Emirati Banks, Reports Say

Payments from Saudi banks to UAE accounts have been held up or returned since May without explanation, according to the FT and Bloomberg, amid rising tensions between the two Persian Gulf states

Saudi Arabia has been blocking or delaying money transfers to accounts in the United Arab Emirates, according to press reports, in a sign of escalating tensions between the two Persian Gulf neighbours.

Financial transfers from Saudi banks to UAE accounts have been returned or held up since May, typically without any explanation, the Financial Times reported this week, citing people familiar with the matter. The affected accounts, the report said, belonged to both businesses and private individuals.

One healthcare company in Dubai told the newspaper that three separate payments from a long-standing Saudi client had been blocked by the kingdom’s banks since mid-May. An executive at the firm said the banks had cited a block imposed by the Saudi central bank without offering further detail, leaving a customer waiting on goods while the payment failed to arrive. Executives at other Dubai-based firms reported similar experiences.

The Saudi central bank rejected the report, saying it imposed no direct restrictions targeting specific countries.

Bloomberg, however, carried similar accounts, with sources describing money sent from Saudi accounts failing to reach recipients in the UAE, being returned to the sender, or electronic payments being blocked outright. That report pointed to rivalry between the two states’ financial institutions as the underlying cause.

An old rivalry

Kristian Coates Ulrichsen of the Baker Institute told Middle East Eye that competition between the two neighbours is long-standing. There has always been economic rivalry between them, he said, noting that measures of this kind have reportedly been used before to raise the stakes, and that the relationship survived earlier periods of tension in the late 2000s and again in 2021.

The reported disruption comes against a broader backdrop of realignment in the Persian Gulf. During the recent US-Israeli war on Iran, attacks were launched from the territory of several Persian Gulf Arab states. The failure of that campaign is said to have precipitated a falling-out between US President Donald Trump and the Saudi leadership, and, according to some reports, has prompted Riyadh to soften its posture toward Iran as it reassesses its own security priorities.

Reference: PressTv