Pakistan considers dumping dollar for yuan in trade with China

[Sine Nomine]

@Syed.Ali.Haider i think chini baniya Pakistan ka kandha istemaal kar raha hai.

 

[cloud4000]

Has the decision actually been made, or is it just being "considered" at present?

Well the OP states Pakistan is examining a proposal to accept the yuan.

 

[Reichsmarschall]

Top 4 comments on post by RT 2 comments from brain dead Pakistan hating pea sized brain Indians and two from non-Pakistani Whites see the differences between their mentality and thinking Indian Janta has already accepted US as their Pappa and and are ready drop their Sarees for uncle Sam

 

[VCheng]

Well the OP states Pakistan is examining a proposal to accept the yuan.

The "proposal" that is a Chinese demand? No decision as of yet, I take it.

 

[beijingwalker]

Pakistan considers dumping dollar for yuan in trade with China
Published time: 19 Dec, 2017 10:00

The government of Pakistan is considering a proposal to start using the Chinese yuan in trade with China, according to the Interior Minister Ahsan Iqbal, as quoted by Pakistan’s English-language daily Dawn.

“We are examining the use of yuan instead of the US dollar for trade between the two countries,” the minister told the media after the official launch of the Long Term Plan (LTP) for the China-Pakistan Economic Corridor (CPEC).

Bilateral trade between Pakistan and China was worth $13.8 billion in 2015 to 2016, a decade after the countries signed a free trade agreement. Pakistan will continue to use the rupee domestically, according to Iqbal.

The LTP includes cooperation between the countries in energy, information network infrastructure, road and rail connections, trade and industrial parks, tourism, agriculture, and poverty alleviation. The plan will be implemented in three phases, the first ending in 2020, followed by another in 2025, with completion in 2030.

Under the plan, the countries intend to develop multi-level cooperation and strengthen policy coordination, as well as establish and improve the cross-border credit system and financial services. Karachi and Beijing are also planning to enhance currency swap arrangements and create a bilateral payment and settlement system.

Earlier this year, China pledged to invest $57 billion in Pakistan to fund the CPEC project as part of its “Belt and Road” initiative, which aims to build a ‘New Silk Road’ of land and sea trade routes across more than 60 countries in Asia, Europe, and Africa.

https://www.rt.com/business/413608-pakistan-chinese-yuan-bilateral-trade/

 

[VCheng]

@Syed.Ali.Haider i think chini baniya Pakistan ka kandha istemaal kar raha hai.

There is no decision as of yet, so we must wait for it first.

 

[Solomon2]

...Under the plan, the countries intend to develop multi-level cooperation and strengthen policy coordination, as well as establish and improve the cross-border credit system and financial services. Karachi and Beijing are also planning to enhance currency swap arrangements and create a bilateral payment and settlement system.

Translated, this means that China will in the future have a large say in the exchange rate of Pakistan's currency: no way are the Chinese going to permit Pakistan taking a loan out in renminbi and paying in back in rupees that Pakistan could depreciate as it likes. So Pakistan's central bank won't be able to engage in open-market operations in support of Pakistan's economy or monetary reserves without consulting the Chinese.

 

[VCheng]

Translated, this means that China will in the future have a large say in the exchange rate of Pakistan's currency: no way are the Chinese going to permit Pakistan taking a loan out in renminbi and paying in back in rupees that Pakistan could depreciate as it likes. So Pakistan's central bank won't be able to engage in open-market operations in support of Pakistan's economy or monetary reserves without consulting the Chinese.

That may not be such a bad thing after all.

 

[LeGenD]

Pakistan can choose to conduct trade with the Chinese in Yuan due to reasons highlighted by me in this thread: https://defence.pk/pdf/threads/ending-dollar-dominance-in-world-market-updates.526367/page-5 (see post no. 69)

But no! Pakistan cannot dump US dollar in its entirety. Impractical and impossible.

 

[Solomon2]

That may not be such a bad thing after all.

Perhaps, yet Pakistanis should be aware that this does turn Pakistan from being an independent actor on the world stage into an economic appendage of China.

 

[nang2]

Perhaps, yet Pakistanis should be aware that this does turn Pakistan from being an independent actor on the world stage into an economic appendage of China.

Nobody is independent in commercial world. Not even a country as isolated as North Korea. It is the interdependence that enables the division of labors, increases efficiency and eventually enriches people.

 

[Solomon2]

But no! Pakistan cannot dump US dollar in its entirety. Impractical and impossible.

Pakistan will have whatever dollars the Chinese permit under the proposed currency swap and coordination arrangements.

Pakistan will also be exchanging its rupee for renminbi at the rate dictated by these arrangements rather than at market, since the renminbi is not yet a fully and freely convertible currency.

 

[nang2]

Pakistan will have whatever dollars the Chinese permit under the proposed currency swap and coordination arrangements.

Pakistan will also be exchanging its rupee for renminbi at the rate dictated by these arrangements rather than at market, since the renminbi is not yet a fully and freely convertible currency.

China doesn't control dollars.

 

[VCheng]

Perhaps, yet Pakistanis should be aware that this does turn Pakistan from being an independent actor on the world stage into an economic appendage of China.

Does Pakistan really have the luxury of being economically independent even before such a step?

 

[tarrar]

Pakistan should get did of Dollar for good & peg RS with Yuan.