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Pakistan, China to transact bilateral trade in yuan

ISLAMABAD (Kyodo) -- Pakistan's central bank Tuesday announced that the bilateral trade between Pakistan and China can be transacted in the Chinese yuan which would go a long way in promoting economic ties and trade.

    A press release issued by the State Bank of Pakistan in Karachi said imports, exports and financial transactions between the two countries can now be denominated in the Chinese yuan.

    It further said that regulatory framework such as opening of letters of credit, clearing of transactions and financing facility in the yuan has been out in place.

    The Chinese yuan is now at par with other international currencies as the U.S. dollar, euro and Japanese yen, the press release said.

    China has extended $56 billion financing facility to the China-Pakistan Economic Corridor which envisages linking the southwestern Pakistani port city of Gwadar and the Chinese autonomous region of Xinjiang.

    The central bank move would greatly ease pressure on foreign exchange outflow as several projects under the project has been commissioned and repatriation of their profits becomes due in coming months and years.

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