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@Syed.Ali.Haider i think chini baniya Pakistan ka kandha istemaal kar raha hai.
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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.
@Syed.Ali.Haider i think chini baniya Pakistan ka kandha istemaal kar raha hai.
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....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.
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.That may not be such a bad thing after all.
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.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.
Pakistan will have whatever dollars the Chinese permit under the proposed currency swap and coordination arrangements.But no! Pakistan cannot dump US dollar in its entirety. Impractical and impossible.
China doesn't control dollars.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.
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.