Governor of the State Bank of Pakistan, Jameel Ahmed, has proposed the use of the Chinese currency (RMB) for trade and investment between Pakistan and China. He stated that such a move could further strengthen and expedite the relations between both countries.
Speaking at an event in Islamabad, the Governor of the State Bank highlighted the significance of economic ties between Pakistan and China. He mentioned that the State Bank has established necessary regulatory frameworks to facilitate the use of the Chinese currency, also known as RMB, in trade and investment, making tasks such as LC (Letter of Credit) openings and obtaining financing within RMB more convenient.
Jameel Ahmed emphasized that, in terms of regulations, RMB can compete with other international currencies like the US Dollar, Euro, and Japanese Yen in Pakistan. Both public and private sector businesses in Pakistan are granted full permission to use RMB for bilateral trade and investment activities.
He explained that the efforts of the central bank to promote the use of RMB in trade with China have yielded positive results. Pakistan’s earnings in RMB from China, which were approximately 2% of the total financial year earnings in 2018, have increased to nearly 18% in the financial year 2022.
Jameel Ahmed also highlighted the benefits of using the local RMB clearing system and trade within RMB, which include reduced processing time, lower costs for the local banking system, easy access to RMB clearing within Pakistan, improved exchange rates for bilateral trade and enhanced competition for Pakistani businesses.
Governor of the State Bank mentioned that establishing the local RMB clearing system will be mutually beneficial for China-Pakistan relations in general and Pakistan’s economy and banking system in particular. He assured that the State Bank will continue to provide policy and regulatory cooperation to strengthen economic and financial relations for the mutual benefit of consumers and businesses.
Governor of the State Bank addressed the audience at the Jinnah Convention Center in Islamabad during an event organized by ICBC Bank on the promotion of RMB usage in cross-border settlements. This event was held as part of the bank’s initiative to appoint RMB clearing agents for the bank’s designation in Pakistan.