KARACHI, Oct 22: Pakistan and China’s central banks signed an Agency Agreement which allows the State Bank of Pakistan to conduct investment activity in the Chinese Inter-bank Bond Market, SBP said in a statement on Monday.

Governor of the People’s Bank of China Dr Zhou Xiaochuan and Governor of SBP Yaseen Anwar signed the agreement in Beijing.

The Chinese Inter-bank Bond Market is the largest RMB (official currency of China) denominated bond market with RMB 21.4 trillion turnovers during 2011.

This agreement represents the manifestation of close collaboration between the two central banks that has been built over time and is also part of a follow-up cooperation to the bilateral Currency Swap Agreement between the two countries.

“Access to the Chinese Bond Market will provide the necessary flexibility to State Bank of Pakistan in diversifying and optimal management of Foreign Exchange Reserves in order to meet the associated objectives,” said the SBP.