KARACHI: To facilitate international trade in Chinese yuan (CNY), the State Bank on Tuesday allowed the Standard Chartered Bank (SCB) Pakistan to set up its local CNY clearing and settlement.

“SCB Pakistan can now open CNY accounts of banks operating in Pakistan to facilitate settlement of CNY-based transactions, such as remittances to and from China,” said the central bank.

The SCB can also provide CNY liquidity to the interbank market for the settlement of CNY-based transactions.

Earlier, the SBP had also permitted Industrial and Commercial Bank of China Ltd (ICBC) Pakistan in 2015 and Bank of China (BOC) Pakistan in 2018 to establish similar local CNY clearing and settlement mechanism in the country.

“The expansion of local CNY clearing and settlement setup in Pakistan is expected to further improve efficiency of the local banking system in terms of CNY transactions, enhance market liquidity and facilitate rising trade and investment with China,” said the SBP.

Published in Dawn, March 20th, 2019