Yuan to facilitate Pakistan in business activities

ISLAMABAD: Economists and businessmen have termed Pakistan's recent decision to use the Chinese currency renminbi, or the yuan, as a foreign currency for denominating foreign currency transactions in the country as a great historical step.

The decision, they said would ease pressure on the country's foreign currency exchange reserves in US dollars and facilitate transactions for trade and investment activities, reports Chinese official news agency Xinhina.

The State Bank of Pakistan early this week said that the Chinese yuan was now an approved foreign currency at par with other international currencies such as US dollar, euro and Japanese yen. It also said that both the public and private sector enterprises can freely choose the currency for bilateral trade and investment activities.

Hafiz Pasha, vice chairman of the Institute for Public Policy, said the decision is timely and ideal because the country's economic relationship with its largest trade partner China is growing at a fast pace and most of the country's foreign investment is coming from China.