Pakistan, China mulling to make yuan standard currency for trade

PAKISTAN and China are mulling to make Chinese currency yuan as the standard currency instead of American dollar for mutual trade and if negotiations between the two countries prove successful, then the trade with China would be possible without dollar. According to the authorities concerned, the talks in this context are at very initial stage and nothing final can be said at present. However, they said that representatives of central banks of both the countries in their talks would discuss possibility of reliance on Chinese currency yuan for paying trade transaction. Talking to the BBC, State Bank of Pakistan spokesman Waseem Uddin confirmed deliberations for reliance on Chinese currency and said that date for SBP Governor Saleem Raza visit to China had not been finalised yet. He said, 'For holding talks vis-a-vis reliance on Chinese currency, we are waiting for invitation from Chinese Central Bank. After that, the SBP Governor would hold detailed talks with Chinese authorities. If talks with China in this regard prove successful, then Pakistan would become 7th country to initiate trading with China in yuan and not in US dollar. Argentine, Hong Kong, Indonesia, Malaysia, South Korea and Belarus have already signed agreements for trade with China with respect to yuan, and Russia and Japan are holding negotiations in this regard. Karachi Chamber of Commerce and Industry President said if Pakistan and China sign such an agreement, it would be a positive step. However, he said, China turned stable soon after world financial crisis and its currency is becoming stronger. He added that it is yet to be seen what are the impacts of making yuan as standard currency.

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