Islamabad, 25 July 2022 (TDI): Pakistan and China are closing in to deal in RMB and Pakistani Rupees in the future. The decision is made to tackle the rising financial challenges in Pakistan.
According to Chaudhry Salik Hussain, the Federal minister for the Board of Investment (BOI), negotiations between Pakistan and China are still going on.
He said: “We can soon be dealing in RMB along with the US dollars. Both options can be utilized”
The State Bank of Pakistan (SBP) was previously instructed by Prime Minister Shehbaz Sharif to meet with the Industrial and Commercial Bank of China (ICBC) and Bank of China. The meeting was arranged to discuss the usage of RMB and PKR for bilateral trade between China and Pakistan.
The directives were given to SBP by Prime Minister Shehbaz during a meeting with Chinese businesses on May 30 of this year.
Tackling Financial Challenges
The RMB is one of the world’s reserve currencies and the official currency of China. Additionally, it is the eighth-most traded currency globally.
Pakistan and China are closing in to deal in RMB and Pakistani Rupees (PKR) as Pakistan faces financial challenges,FM for #BOI Chaudhry Salik Hussain told Gwadar Pro
— Gwadar Pro Official (@Gwadar_Pro) July 24, 2022
A pilot project will be launched in the first phase to promote trading in the Chinese currency. It will include the implementation of “RMB pricing”. The second phase will concentrate on RMB financing and settlement policies.
According to the official information, the exchange rate for the currencies of the two nations would be decided in the China Foreign Exchange Trading System (CFETS) and in authorized institutions designated as cross-border currency markets in China and Pakistan.
Pakistan and China have close commercial links. China has been Pakistan’s main source of imports for machinery, transportation gear, iron, steel, yarn, and textiles.
In the meantime, Pakistan supplied China with textile yarn, resource-based goods, and fabrics.
The deal will boost the trade ties between the two friendly nations. Also, China had previously proposed to Pakistan to set up RMB Capital Circulation System. It would promote trade and transactions in the Chinese currency.
