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Pakistan, China to trade in local currencies

GreenFalcon

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Pakistan, China to trade in local currencies
By Our Correspondent
Published: November 4, 2016
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KARACHI: Standard Chartered has taken the lead in conducting a roadshow in Pakistan to inform businessmen that hurdles to trade with China in local currencies – Pakistani rupee and Chinese renminbi – have been razed.

Until now, the two countries were trading in dollars, which caused hurdles in the way of banking transactions for traders. The two nations signed a currency swap agreement a couple of years ago.

Standard Chartered Pakistan Chief Executive Officer Shazad Dada said they had a very fruitful meeting with the State Bank of Pakistan on Thursday morning. The central bankers pledged to facilitate trade in the two currencies.

The roadshow is held at a time when most banks in the two nations have yet to set up their branches in each other’s countries. However, Standard Chartered has branches in both the countries.

The roadshow is part of an international series, as the Greater China Region’s Standard Chartered has conducted similar shows in the Middle East and Africa in recent days.

China is now in agreement with eight countries to conduct trade in their local currencies. These include Pakistan, Hong Kong, the UAE and Qatar.

China has been conducting roadshows since its official currency renminbi was included in the IMF’s Special Drawing Rights (SDR) list of global currencies, effective from October 1, 2016. The IMF lends in SDR denomination to nations across the world.

This coincided with China’s on-going investment worth $46 billion in Pakistan under the China-Pakistan Economic Corridor (CPEC).

Carmen Ling, the bank’s delegation lead to Pakistan and Managing Director, said the infrastructure had been laid to begin trade in local currencies. “Now, it all depends on how fast the requisite information is disseminated to businessmen.”

More than 60% of Standard Chartered’s market across Africa, Asia and the Middle East stand to benefit from the initiative. Twenty-five of the group’s 72 markets are in Africa and the Middle East.

The initiative could facilitate financing for Pakistan’s key infrastructure projects, while encouraging cross-border economic and trade partnerships, not only with China, but also with those markets positioned along the initiative, she added.

Published in The Express Tribune, November 4th, 2016.
http://tribune.com.pk/story/1220159/bilateral-commerce-pakistan-china-trade-local-currencies/
 
OMG. I had the gut feelings that it's coming, but not that fast. Now 127 countries, whose major trade partner is China, potentially can trade in the Chinese currency. It's a major blow for dollar. Is the end of the world (American off course) nearing????
 
If that's true, it's an excellent news!
 
Pakistan should unpeg itself from Dollar & peg its currency with Yuan. This move will surely do good to us.
 


Good news!

P.S.: I didn't receive your tag. Try tag less than 5 next time, perhaps it's system limit.


OMG. I had the gut feelings that it's coming, but not that fast. Now 127 countries, whose major trade partner is China, potentially can trade in the Chinese currency. It's a major blow for dollar. Is the end of the world (American off course) nearing????


Over 100 countries are doing it now, Pakistan being a close trade-investment ally is most welcome to join the band wagon. Look forward to closer economic ties with Turkey as well.

https://defence.pk/threads/more-tha...nts-with-mainland-china-and-hong-kong.459177/

I wonder what will be the reaction of Murikaans


They single out six countries for special monitoring, the list includes newly added Switzerland, and five usual targets - Japan, Korea, Taiwan, Germany and of course China. Either something is wrong with all six currencies, which are issued by six major creditor nations, three of which in SDR, or something wrong with dollar.

https://defence.pk/threads/us-singl...-for-special-monitoring.457610/#ixzz4P283kp9X
 
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What is the advantage of trading in local currencies ?
 
What is the advantage of trading in local currencies ?

Many advantages .. two below

1. This would assist in Pakistan bypassing sanctions that may be imposed unilaterally by USA etc.
2. We will not also have no need to rely on the US$ reserves to buy goods as Chinese can buy in US$ on our behalf (or from countries who will not trade with us) and we can pay in PKR.
 
What is the advantage of trading in local currencies ?

USD isn't required to buy Chinese goods which lowers the value of PKR increases USD. Only to have the Chinese sell their USD to Pakistan so it can boost it's currency. I'm skipping a few steps but you get the point.

Your trade is so low volume it won't affect America at all.

Pakistan-China trade is ~$9Billion, but China's exports of $1.8Trillion will make a dent.

But it all comes down to how freely the RMB is traded, as the CCP will have to let it float freely than manipulate it.
 

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