The Financial Times reported that since May, Saudi banks have begun blocking or delaying money transfers to bank accounts in the UAE, raising concerns among companies that rely on regular financial flows between the two countries.
The newspaper quoted informed sources as saying that transfers transferred from Saudi entities to Emirati accounts belonging to companies and individuals residing in Dubai are detained for several days before being returned without explanation, while an executive at a Dubai-based healthcare company said that three payments from a Saudi customer have been blocked and returned since mid-May despite a years-long business relationship.
According to the official, attempts to make transfers even through the bank's in-person presence did not work, as employees received instructions indicating a ban issued by the Saudi Central Bank without providing further details.
The Saudi Central Bank denies... The UAE confirms the depth of economic ties
The Saudi Central Bank denied that there are any country-specific restrictions, stressing that banks are implementing risk-based procedures to protect the integrity of the financial system, and that the sector operates within a strong regulatory framework.
The newspaper quoted an Emirati official as saying that the Ministry of Economy had not received official complaints about unusual delays in remittances, stressing that economic relations between the two countries are "deep and long-term" and that the competent authorities would review any specific concerns raised through official channels.
The official added that some small remittances had been "unusually" halted, while an Emirati businessman said his company had been forced to redirect funds through Bahrain after being subjected to an unjustified ban on remittances from Saudi Arabia.
Political disputes cast a shadow over the Gulf economy
The developments come amid escalating political tensions between Riyadh and Abu Dhabi since late last year, after Saudi Arabia accused the UAE of supporting a Yemeni separatist faction that launched an attack on allied forces in Yemen.
The disputes intensified after the UAE announced its withdrawal from OPEC in April, in a move that was considered a blow to Saudi Arabia's leadership of the oil bloc, despite Abu Dhabi's assertion that the decision is linked to its "economic vision and the development of its energy file."
Although Saudi officials have previously confirmed that the political dispute will not be reflected in economic relations, analysts believe that the recent measures may reflect the transfer of tensions to the financial and trade sphere, especially since Dubai is a regional hub for companies that serve the Saudi market, and that any disruption in remittances may affect supply chains and daily transactions between the two parties.
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