ISLAMABAD (APP): The State Bank of Pakistan (SBP) has allowed Standard Chartered Bank (SCB) Pakistan Limited to establish their local CNY (Chinese Yuan Renminbi) clearing and settlement setup in Pakistan.

The SCB Pakistan can now open CNY accounts of the banks operating in Pakistan to facilitate settlement of CNY based transactions such as remittance to and from China, said a statement issued by the SBP on Tuesday.

The SCB can also provide CNY liquidity to the interbank market for the settlement of CNY based transactions.

It may be mentioned here that over the years, the SBP has been at the forefront in providing a conducive policy and regulatory environment to encourage the use of local currencies in trade and financing transactions between China and Pakistan.

Earlier, SBP had also permitted Industrial and Commercial Bank of China Limited (ICBC) Pakistan in 2015 and Bank of China Limited (BOC) Pakistan in 2018 to establish similar local CNY clearing and settlement mechanism in Pakistan.