Standard Chartered has taken the lead in conducting a roadshow in Pakistan to inform businessmen that hurdles to trade with China in local currencies – Pakistani rupee and Chinese renminbi – have been razed.
Until now, the two countries were trading in dollars, which caused hurdles in the way of banking transactions for traders. The two nations signed a currency swap agreement a couple of years ago.
Standard Chartered Pakistan Chief Executive Officer Shazad Dada said they had a very fruitful meeting with the State Bank of Pakistan. The central bankers pledged to facilitate trade in the two currencies.
The roadshow is held at a time when most banks in the two nations have yet to set up their branches in each other’s countries. However, Standard Chartered has branches in both the countries.
The roadshow is part of an international series, as the Greater China Region’s Standard Chartered has conducted similar shows in the Middle East and Africa in recent days.
China is now in agreement with eight countries to conduct trade in their local currencies. These include Pakistan, Hong Kong, the UAE and Qatar.
China has been conducting roadshows since its official currency renminbi was included in the IMF’s Special Drawing Rights (SDR) list of global currencies, effective from October 1, 2016. The IMF lends in SDR denomination to nations across the world.
This coincided with China’s on-going investment worth $46 billion in Pakistan under the China-Pakistan Economic Corridor (CPEC).
Carmen Ling, the bank’s delegation lead to Pakistan and Managing Director, said the infrastructure had been laid to begin trade in local currencies. “Now, it all depends on how fast the requisite information is disseminated to businessmen.”
More than 60% of Standard Chartered’s market across Africa, Asia and the Middle East stand to benefit from the initiative. Twenty-five of the group’s 72 markets are in Africa and the Middle East.
The initiative could facilitate financing for Pakistan’s key infrastructure projects, while encouraging cross-border economic and trade partnerships, not only with China, but also with those markets positioned along the initiative, she added.