Talks progressing on Sino-Pak currency swap

[Omar1984]

Talks progressing on Sino-Pak currency swap ​

ISLAMABAD: Pakistan and China are considering a ‘currency swap arrangement,’ which if finalised would enable the two countries to do business in rupee and yuan RMB replacing greenback as the trading money under an initiative to lower reliance on US dollar and diversify foreign exchange reserves.

‘We have made good progress in our discussions on the currency swap arrangement,’ Chinese Ambassador Lou Zhaohui told Dawn on Friday.

The two sides have completed discussions at the finance secretaries’ level and Governor State Bank of Pakistan Syed Salim Raza would shortly visit Beijing for further negotiations in this regard.

The State Bank, in case of finalisation of the agreement, would have to amend its foreign exchange reserve rules.

Disclosing the current state of talks on the proposed arrangement, the Chinese envoy said Islamabad and Beijing were working out the modalities for the implementation of the agreement.

If the arrangement materialises it would be the eight such agreement signed by Beijing, which previously has similar pacts with Argentina, Belarus, Hong Kong, Indonesia, Malaysia, South Korea and Russia.

‘Just last week we concluded an agreement with Hong Kong,’ Mr Zhaohui said.

China is expanding the role of Yuan RMB in international finance and trade and is eyeing it as a major international currency in the long run along with euro and US dollar.

The ambassador felt that the currency swap was a good idea for boosting bilateral cooperation and said China was open and flexible to it.

A currency swap arrangement, experts believe, would ease liquidity issues for Pakistan and conserve dollar reserves. Additionally, it would lower the transaction costs and avoid the risk of fluctuations in exchange rates.

Mr Zhaohui said there was no fixed timeframe for the finalisation of the arrangement.

Bilateral trade between China and Pakistan is about $7 billion with the trade balance heavily in China’s favour, whose exports to Pakistan are close to $6 billion, whereas Pakistani exports to China have been valued at about $1 billion.

China in 2007 overtook the US to become Pakistan’s largest single country trading partner. Besides, China has made significant investment in different projects in Pakistan.

 

[Hyde]

well i don't know how much successful this idea is going to be..... but as we all know there are many fake notes being issued in Pakistan and it is possible this idea may never become a reality. Not just a fake currency issue but there are many things like Pakistan's economy is not stable itself and the volume of exports to china is 4-5 times less than the imports as we can see from the above reports and we have to balance this volume either by decreasing the imports or increasing the exports otherwise we will be pocketing Yuan only and the rupees will never reach to china

Its a good step but i think it will take sometime to become a reality may be after Gawadar port is fully operational and the network to china through Road and Train is made up may be that time swapping the currency might little bit help and before that i can't say anything

 

[Jamshed]

ell i don't know how much successful this idea is going to be..... but as we all know there are many fake notes being issued in Pakistan and it is possible this idea may never become a reality. Not just a fake currency issue but there are many things like Pakistan's economy is not stable itself and the volume of exports to china is 4-5 times less than the imports as we can see from the above reports and we have to balance this volume either by decreasing the imports or increasing the exports otherwise we will be pocketing Yuan only and the rupees will never reach to china

Its a good step but i think it will take sometime to become a reality may be after Gawadar port is fully operational and the network to china through Road and Train is made up may be that time swapping the currency might little bit help and before that i can't say anything

i was not expecting this answer from you Mr X do u think they will make payments by begs full of money? lol definatly it will be electronic transfers it will not be like ppls going with begs full of money and giving it to somebody in china