Pakistan is actively working to diversify its international trade settlement mechanisms and promote the use of local currencies.
This was stated by Second Vice Chair of the G-24 and Executive Director at the State Bank of Pakistan (SBP), Muhammad Ali Malik.
Speaking at the G-24 press briefing on the sidelines of the IMF–World Bank Annual Meetings, Malik said Pakistan has already signed a currency swap agreement with the People’s Bank of China (PBoC) to facilitate trade in local currencies and support the gradual transition away from dollar-denominated settlements.
“From Pakistan’s perspective, we have been working quite hard to diversify and settle some trade in local currencies. We have signed a currency swap agreement with the People’s Republic of China, with the central bank of China. And one of the objectives is to assist in the transition to local currency. So we are very keen on that. And gradually, we are working on that to diversify”, Malik added.
He emphasized that the SBP’s objective is to create an enabling environment for businesses to choose the currencies in which they conduct trade, allowing importers and exporters to denominate transactions in local or alternative currencies based on commercial viability.
He further added, “our objective is just to diversify. And it is really up to the choice of traders, importers, and exporters in which currencies they want to denominate. But we, as a central bank, want to provide an enabling environment to businesses so that they can make a choice, a commercial choice if they want to determine or denominate their trade in local currency. So we are supportive of that, and we are working hand in hand with the industry there.”
Reference Link:- https://www.brecorder.com/news/40387903