ISLAMABAD - The business community on Tuesday welcomed extension in the currency swap agreement between Pakistan and China terming it beneficial for the local economy facing multiple challenges.

The rupee-yuan swap amount has been doubled from 10 billion yuan to 20 billion yuan which will reduce the dependence of Pakistan on US dollar at a time when forex reserves and rupee are under pressure, an official of FPCCI said.

The deal was signed five years ago but it didn’t work but now the situation has changed, said Malik Sohail, chairman Coordination FPCCI. He said, “Now China is our biggest trading partner, bilateral trade is growing, CPEC has become a reality, therefore, doubling the swap size to 351 billion Pakistani rupees is a good move.”

Malik Sohail said that Pakistan continues to distance itself from the US and getting closer to China while the bilateral trade could jump to 13 billion dollars in which Pakistan would be importing items worth 11 billion dollars. Now Pakistan would be able to finance imports from China in Yuan which will also help stabilise rupee, he said, adding that further extension in the deal should not be delayed.

He said that Chinese companies working on CPEC and other projects would be able to send back profits in Chinese currency which will benefit Pakistan’s economy. The tensions between US and China and the new moves of American President has forced many countries to reduce dependence on the dollar and conduct international trade in local currencies.