KARACHI: In order to further expand the local Chinese Yuan (CNY) Clearingand Settlement Mechanism in Pakistan, the State Bank of Pakistan (SBP) onTuesday allowed Standard Chartered Bank (SCB) Pakistan Limited to establishtheir local CNY clearing and settlement setup in the country.
SCB Pakistan can now open CNY accounts of the banks operating in Pakistanto facilitate settlement of CNY based transactions such as remittanceto/from China.
SCB can also provide CNY liquidity to the inter-bank market for thesettlement of CNY based transactions.
It may be mentioned here that over the years, State Bank of Pakistan (SBP)has been at the forefront in providing a conducive policy and regulatoryenvironment to encourage the use of local currencies in trade and financingtransactions between China and Pakistan.
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Earlier, SBP had also permitted Industrial and Commercial Bank of ChinaLimited (ICBC) Pakistan in 2015 and Bank of China Limited (BOC) Pakistan in2018 to establish similar local CNY clearing and settlement mechanism inPakistan.
The expansion of local CNY clearing and settlement setup in Pakistan isexpected to further improve efficiency of the local banking system intransacting in CNY, enhance market liquidity and facilitate rising tradeand investment with China through fostering competition and increasing CNYresource avenues.
