Governor of the Central Bank of Pakistan Jameel Ahmed has said that the use of the Chinese currency Renminbi (RMB) for foreign trade transactions and investment can further strengthen economic and financial relations between the two countries.
The governor was speaking at a function organized by the Industrial and Commercial Bank of China (ICBC) at the State Bank of Pakistan Islamabad regarding the nomination of People’s Bank of China as the RMB clearing agent in Pakistan. was held.
It should be noted that the Chinese currency has become the second most used foreign trade currency in the world after the dollar, surpassing the Western currency Euro. South Asian countries, including Bangladesh and India, now use the renminbi after the dollar. B, whose base unit is called Yuan, is being used preferentially.
In Asia, several countries in the Middle East and Far East are already rapidly adopting the Chinese currency for foreign trade. This week, China opened a currency clearing house in the Southeast Asian country of Laos. UAE and Qatar are also using it for commercial transactions. Meanwhile, Pakistan is also doing trade with Russia in Chinese currency.
In his speech, Jameel Ahmed said that the State Bank of Pakistan (SBP) considering the importance of special economic relations with China, the required regulatory framework in the country to facilitate the use of Chinese currency in trade and investment transactions. has been implemented. Under which now the business community can not only open letters of credit for foreign trade in Chinese currency but also get investment facilities in RMB under this framework.
The State Bank Governor said that after the implementation of this new framework, in terms of regulations in Pakistan, the use of RMB has become at par with other international currencies such as US Dollar, Euro and Japanese Yen. Now both the public and private sectors in Pakistan are free to choose RMB as the currency for bilateral trade and investment.
As a result of the central bank’s efforts to promote the use of the RMB in trade with China, trade in the Chinese currency will reach about 18 percent in 2022, up from 2 percent in fiscal 2018.
The State Bank Governor said that banks can play an important role in promoting the Chinese currency by providing their customers with the necessary information on the regulatory framework in China for transactions in RMB.
He hoped that Pakistani businessmen would increase their knowledge of the Chinese market and explore the benefits of doing business in RMB on a more competitive basis.
He reiterated that the central bank is committed to providing policy and regulatory support to further strengthen economic and financial ties with China for the mutual benefit of consumers and businesses in both countries.
