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KARACHI: Pakistan and China agreed to increase the currency swap amount while the agreement period has been extended for three years, the State Bank said on Thursday.

China has emerged as the biggest trade partner of Pakistan, with trade volume increasing rapidly in the last five years.

This brisk increase in trade forced the two countries to make trading easy.

The currency swap arrangement (CSA) between State Bank of Pakistan (SBP) and People’s Bank of China (PBOC) has been extended for a period of 3 years in respective local currencies.

It further said that both the central banks have agreed to increase the CSA amount from CNY (Chinese Yuan) 10 billion to CNY 20bn and from Rs165bn to Rs351bn.

“The increase in the CSA amount reinforces the commitment of the two central banks to promote the usage of local currencies in bilateral trade and investment and strengthening financial cooperation between the two countries,” said the SBP.

Despite the largest trading between China and Pakistan, banking relations with China are still in an early stage. The currency swap arrangement will facilitate traders to do business with each other in local currency instead of the US dollar.

Published in Dawn, May 25th, 2018