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China welcomes bilateral currency swap agreement

China welcomes bilateral currency swap agreement

BEIJING: China has welcomed Pakistan’s move allowing the yuan to be used for imports, exports and financing transactions for bilateral trade and investment activities. China’s Foreign Ministry Spokesperson Geng Shuang said on Thursday that bilateral monetary cooperation has been deepening since China and Pakistan signed a bilateral currency swap agreement in 2011. “At present, various forms of trade and investment cooperation between China and Pakistan have developed in depth,” he added. Pakistan’s central bank had stated on Tuesday that public and private sector enterprises may use the yuan for bilateral trade and investment. “We encourage market players in both countries to use domestic currency settlement in bilateral trade and investment and welcome Pakistan’s initiatives,” replied Shuang when asked to comment on Pakistan’s move. China believes this will provide a good financial environment for bilateral economic, trade and investment cooperation and the construction of the China-Pakistan Economic Corridor, he added. Both public and private sector enterprises may use the yuan for bilateral trade and investment, the State Bank of Pakistan had said in a statement on Tuesday. “As per current foreign exchange regulations, Chinese Yuan (CNY) is an approved foreign currency for denominating foreign currency transactions in Pakistan,” it said.

“In terms of regulations in Pakistan, CNY is at par with other international currencies such as USD, Euro and JPY,” it added.

The bank said that in light of CPEC, the move would “yield long-term benefits for both the countries”.