Pak-China currency swap agreement signed

Pak-China currency swap agreement signed

The much awaited deal between the two neighbouring countries was finally signed on Friday, when Pakistan and China agreed to a bilateral currency swap to promote trade between the two nations. The agreement was signed to strengthen
the economic ties and to encourage bilateral trade between the two countries.

The swap agreement worth 10 billion Chinese Yuan ($1.58 billion) and Rs. 140 billion ($1.57 billion) was signed on Friday and will end in three years’ time. The State Bank of Pakistan cited that the prime motive of the swap agreement
is “promoting bilateral trade and investment and strengthening financial cooperation.” Such deals will assist a great deal to smooth the grave economic conditions in Pakistan and open up new opportunities for trade and business in both countries.

With the Pak Rupee falling to its record low value of $90.03 this month, severe economic circumstances might emerge in the near future if substantial steps are not taken to revive the economic activities in the country. The current
account deficit of the country is also swollen up to $2.104 in July-November, making the economic scenario even worse. It is expected that the deficit will further increase in the near future, as the loan repayments and lack of foreign aid will play huge part
in making the situation bad. The government of Pakistan has to repay the instalment of debt taken from the IMF early in the coming year and with deteriorating relations with the United States, it is least expected that Pakistan will be receiving further external
aid.

With limited revenue in the coming year and the pressure of repayments IMF debt, the foreign exchange reserves are likely to be adversely affected. This will have direct impact on the economic growth and the GDP of the country
in the coming months. Agreements like Pak-China currency swap will help the country to ease out the pressure on its economy and improve the current account deficit as well.

China’s senior diplomat Dai Bingguo also arrived in Pakistan on Friday for talks with the country whose relations with key backer, the United States, have gone from bad to worse, state news agency Xinhua said. Dai will meet Prime
Minister Yusuf Raza Gilani and President Asif Ali Zardari, Chinese Foreign Ministry spokesman Liu Weimin told a daily briefing.

Short URL: https://www.newspakistan.pk/?p=7217

Posted by Farhan Hameed on Dec 24 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry