Saturday, 27 November 2021

Pakistan allows yuan-based trade with China

Chinese yuan

KARACHI: Pakistan’s central bank has allowed the Chinese yuan to be used for bilateral trade and investment activities, a move which could replace the US dollar for transactions in the strategic CPEC projects.

The State Bank of Pakistan (SBP) said on Monday that all arrangements for using the Chinese currency for trade and investment were already in place.

The adoption of yuan means that Pakistan and China would be able to replace the US dollar for transactions in the USD 50 billion China Pakistan Economic Corridor (CPEC) projects.

 Minister for Planning and Development Ahsan Iqbal had said on December 19 that the government was considering a Chinese proposal to use renminbi or yuan instead of the US dollar for payments in all bilateral trade.

He said it seemed there was confusion about the use of yuan for bilateral trade which was needed to be clarified with a detailed statement.

In Pakistan, yuan is an approved currency for denominating foreign currency transactions.

The SBP has already put in place the required regulatory framework which facilitates the use of yuan in trade and investment transactions such as opening of letter of credits (LCs) and availing of financing facilities in yuan, the report said.

In terms of regulations in Pakistan, yuan is on par with other international currencies such as dollar, euro and Japanese yen.

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