After establishing first branch in Karachi, the Bank of China has now launched clearing and settlement mechanism of Chinse yuan. It has been a great advancing by Pakistan and China towards providing banking support to their Socio-Economic partnership.
Till now Pakistan is conducting international trade in dollars, the arrangements of switching over to yuan for bilateral trade in Pakistan and China will not only strengthen the financial bonds but also elevate the trade and will reduce Pakistan’s dependence in dollars.
People’s bank of China was allowed to provide small loans and currency swap in 2012 and now Bank of China is currently ranked in Pakistan as fourth and fifth in terms of Tier 1 capital and total assets respectively. After the establishment of this Pak- China agreement, yuan liquidity has now increased and arrangements has been done to carry out exports, imports and transactions with China only in yuan.
Meanwhile Habib bank is the first South-Asian bank operating in China and the first Pakistani institution which is receiving both medium and long-term financing in foreign currency.