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The Governor of the State Bank of Pakistan (SBP), Jameel Ahmad, emphasized the strong and enduring economic and financial connections between Pakistan and China. He highlighted that using Renminbi (RMB) for cross-border trade and investment transactions can further enhance these ties. His comments were made at an event organized by ICBC Bank, which celebrated the bank’s designation as the RMB clearing agent in Pakistan by the People’s Bank of China (PBoC).
Governor Jameel Ahmad explained that recognizing the significance of Pakistan’s economic relations with China, the SBP has established the necessary regulatory framework to facilitate the use of RMB in trade and investment transactions. This includes actions such as opening Letters of Credit (L/Cs) and accessing financing facilities in RMB. He stressed that, in terms of regulations in Pakistan, RMB is treated on par with other international currencies like the US Dollar, Euro, and Japanese Yen. This means that both public and private sector entities in Pakistan are free to opt for RMB in their bilateral trade and investment endeavors.
Read more : Pakistan And China Launched Their Debut International Road Trade Route
The SBP’s efforts to promote the use of RMB in trade with China have yielded positive results. RMB-denominated imports from China to Pakistan have increased significantly, rising from about 2% in FY18 to approximately 18% in FY22, as noted by the SBP Governor.
He also outlined the advantages of utilizing the local RMB clearing system and conducting trade in RMB. These benefits include faster transaction processing and reduced costs for the local banking system, easier access to RMB settlement for local banks, more competitive pricing for bilateral trade transactions, and the opening up of new markets for Pakistani businesses.
Governor Jameel Ahmad urged banks to play a crucial role in providing their customers with the necessary support for using RMB in cross-border trade and investment activities.
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