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| SBP Governor Promotes Use of Yuan to Enhanced Trade Relations with China. |
The Governor of the State Bank of Pakistan, Jameel Ahmad, stated on Friday that utilizing the Renminbi (RMB) for cross-border trade and investments with China could enhance the enduring economic and financial bonds between Pakistan and China.
Speaking at the "Promoting the use of RMB in Cross-Border Settlement" event organized by ICBC Bank in Islamabad, he highlighted Pakistan's robust economic relationship with China and the regulatory framework established by SBP to facilitate RMB usage in trade and investment activities, including LCs and financing in RMB.
He underscored that RMB is on par with other international currencies in Pakistan, allowing both public and private sector enterprises to freely opt for RMB in bilateral trade. Due to SBP's efforts, RMB-denominated imports from China to Pakistan rose significantly, reaching around 18 percent in FY22 from 2 percent in FY18.
Governor Ahmad emphasized the benefits of local RMB clearing systems, including quicker transaction processing, reduced costs, enhanced access for local banks, competitive pricing, and access to new markets for Pakistani businesses. He urged banks to inform their customers about the necessary regulatory guidelines for RMB transactions and encouraged Pakistani businesses to explore the advantages of trading in RMB for competitive pricing.
He highlighted that establishing a local RMB clearing system would yield long-term benefits for China-Pakistan relations, Pakistan's economy, and its banking sector.
He reiterated SBP's commitment to supporting policies and regulations to strengthen economic ties with China for mutual benefit. The event marked the designation of the bank as the RMB clearing agent in Pakistan by the People's Bank of China (PBoC).
