China and Pakistan to use yuan in bilateral trade
Pakistan is hoping to boost trade and economic ties with China by trading with the country in yuan, the State Bank of Pakistan in Karachi has announced.
Imports, exports and financial transactions between the two countries can now be denominated in the yuan, it said in a press release.
Regulatory framework such as opening of letters of credit, clearing of transactions and financing facility in the yuan has been put in place, it added.
It said that the move has put the yuan on a par with other international currencies such as the US dollar, euro and Japanese yen, the press release said.
China has extended a US$56 billion financing facility to the China-Pakistan Economic Corridor, which will link the southwestern Pakistani port city of Gwadar and the Chinese region of Xinjiang.
The central bank move would greatly ease pressure on foreign exchange outflow as several projects under the project has been commissioned.
Repatriation of their profits will become due in the coming months and years.