THE Bank of China has officially launched its services in Pakistan for clearing and settlement mechanism of the yuan for bilateral trade, investment activities, imports, exports and financing transactions, a statement said on Saturday.
The bank’s commercial operations have already commenced at its first branch in Pakistan’s southern port city of Karachi in November last year.
Earlier in January, the central bank of Pakistan declared the yuan as an approved foreign currency for denominating foreign currency transactions in Pakistan, declaring that the yuan is at par with other international currencies such as US dollar, euro, yen, and other currencies.
Li Tao, country head and CEO of BOC Pakistan operations, highlighted the global recognition, importance and increasing utilization of the yuan and said that the yuan settlement amount of China’s cross-border trade exceeded 4.36 trillion yuan (US$686 billion) last year.
The bank serves as yuan clearing bank in France, Australia, Malaysia, Hungary, South Africa, Zambia, the United States, according to the statement.
Wang Yu, Counsel General of the Chinese Consulate in Karachi, said BOC’s yuan operations will build another financial artery in China’s Belt and Road Initiative as well as the China-Pakistan Economic Corridor.
Pakistani bankers hoped that the yuan clearing and settlement mechanism will boost transactions, including trade settlement and direct investment with the increasing demand for yuan from enterprises and financial institutions in the two countries.
The deputy Governor of the State Bank of Pakistan, Jamil Ahmad, hoped BOC can provide liquidity in the interbank market.