China & Pakistan Trade In Yuan

[mrrehan]

Pakistan brings Chinese yuan on par with US dollar for investment & trade with Beijing
Published time: 4 Jan, 2018 15:22 Edited time: 4 Jan, 2018 19:34

Pakistani companies have been given a green light to use the Chinese yuan in trade with Beijing, which could potentially sideline the US dollar and other currencies used there. The move coincides with a US-Pakistan aid row.

The State Bank of Pakistan (SBP) said it “has taken comprehensive policy-related measures to ensure that imports, exports and financing transactions can be denominated in CNY,” according to a statement issued late on Tuesday. CNY is now effectively on par with the US dollar, euro and other international currencies in the country.

Companies are free to engage in CNY transactions with immediate effect. “SBP has already put in place the required regulatory framework which facilitates use of Chinese yuan in trade and investment transactions,” the bank said.

It also noted the “growing size of trade and investment” between Pakistan and China under the China-Pakistan Economic Corridor (CPEC) agreement. The use of yuan will further boost bilateral trade and “will yield long-term benefits for both [of] the countries,” the bank added.

While Islamabad and Beijing had already been considering ditching the US dollar for yuan in bilateral trade for some time, the announcement comes at a particularly low point in US-Pakistani relations. US President Donald Trump has vowed to halt US aid to the country, stating in a recent tweet that Washington has “foolishly given Pakistan more than $33 billion in aid over the last 15 years, and they have given us nothing but lies and deceit.” Trump has been repeatedly accusing Islamabad of providing a “safe haven to the terrorists,” referring to Taliban militants.

The US administration subsequently confirmed that it would further withhold $255 million of military aid to Pakistan. Islamabad has expressed “deep disappointment” over Washington’s decision, while describing Trump’s remarks as “completely incomprehensible.”

ALSO A RELATED WRITING

China, Pakistan To Trade In Yuan – What Does This Mean For India?
By: Ashok Sajjanhar
Jan 06, 2018, 1:53 pm

 

[graphican]

From Trump's madness, America will gain less and lose more.

Pakistan is effectively in control of the situation which is also read by investors and general public. Despite trumps's warnings, stock exchange is moving up and has reached its new maximum in the last couple of days.

 

[war&peace]

It is not just an excellent decision, it is a historic decision and will go down in the annals of history as one of key turning points.

From Trump's madness, America will gain less and lose more.

Pakistan is effectively in control of the situation which is also read by investors and general public. Despite trumps's warnings, stock exchange is moving up and has reached its new maximum in the last couple of days.

Trump is undoing USA. Though it needs to be ascertained whether he is doing it out of sheer stupidity or deliberately.

 

[AZ1]

Its just start russia iran and turkey will join too

 

[idune]

Many people did not realize significance of this decision. This one will take Pakistan long way to achieve strategic independence. And US policy makers perhaps most angry about this decision.

I think Iran, Russia, ASEAN, Brazil, Venezuela (saudis will be soon) countries also trade using Yuan. Next step would be inter-country trade (i.e. Pakistan and Iran) using Yuan instead of USD. That will be the day. Pending withdrawal from USD dominated world trade is ultimate achilles heel for US.

 

[AyanRay]

It is not just an excellent decision, it is a historic decision and will go down in the annals of history as one of key turning points.

India Russia has an agreement to trade in rupee or ruble. India trades with Nepal and Bhutan in rupee. Until couple of years ago India Iran used to trade in INR. Didn't knew all these were so historic or turning points. Foolish Indians never celebrated it.

Many people did not realize significance of this decision. This one will take Pakistan long way to achieve strategic independence. And US policy makers perhaps most angry about this decision.

I think Iran, Russia, ASEAN, Brazil, Venezuela (saudis will be soon) countries also trade using Yuan. Next step would be inter-country trade (i.e. Pakistan and Iran) using Yuan instead of USD. That will be the day. Pending withdrawal from USD dominated world trade is ultimate achilles heel for US.

There is just one problem here, China is a net exporter, in fact its trade surplus is massive. So how are these countries which you just mentioned are supposed to earn Renminbi if China simply isn't buying anything? You know right how US $ became the preferred world currency?