Pakistan and China on Wednesday signed an agreement on RMB clearing arrangements in a move to avoid the complications of the international US dollar system as well as facilitate the transfer of funds to revive Chinese-backed projects in Pakistan. .
In this regard, a memorandum of understanding was signed between State Bank of Pakistan and People’s Bank of China (PBoC).
On Pakistan’s side, the agreement was signed by State Bank Governor Jameel Ahmed, while on China’s side, PBOC Governor Yi Geng signed it.
The establishment of RMB clearing arrangements in Pakistan will further promote the use of RMB for cross-border transactions between Chinese and Pakistani businesses and financial institutions. It will also promote bilateral trade and investment between the two countries.
The establishment of a RMB clearing unit in the country means that Pakistan no longer needs to use its precious US dollar reserves to trade with China.
Moreover, China will also not have to depend on remittance of US dollars to Pakistan while funding China-cooperative mega projects in the country.
