Central banks of Pakistan and China have signed a Memorandum of Understanding (MoU) to establish renminbi (RMB) clearing arrangements in Pakistan.

The State Bank of Pakistan (SBP) and Peoples Bank of China (PBoC) have signed an agreement for the RMB (Chinese currency) clearance in Pakistan, the SBP stated.

The MoU was signed by SBP Governor Jameel Ahmad and PBoC Governor Yi Gang in the recent China visit of Prime Minister Shehbaz Sharif, according to the SBP statement.

Renminbi clearing arrangements in Pakistan will boost usage of RMB for cross-border transactions among Chinese and Pakistani enterprises and financial institutions.

“This will also promote bilateral trade and investment between the two countries,” according to the central bank.

SBP Governor Jameel Ahmad was part of the delegation accompanied with PM Shehbaz Sharif in his visit of China.