All companies operating in the Gwadar South Free Zone and Gwadar North Free Zone have begun directly converting Renminbi (RMB) into Pakistani Rupees (PKR) for their trade and business activities.

This marks a significant milestone in the currency exchange system between Pakistan and China, according to a report carried by Gwadar Pro on Friday.

“With the implementation of the new financial arrangement that allows direct conversion of RMB into PKR, Chinese investors can save up to 500,000 Pakistani rupees on every transaction of 10 million rupees,” said an official from the Hangeng Trade Company in Gwadar.

He further explained, “Under the previous financial system, Chinese traders and investors had to first convert RMB into US dollars and then into rupees.

Due to the volatile value of the dollar, they often bore exchange rate losses.”

The developments come after officials from ICBC, along with senior officials from the Chinese Consulate in Karachi and the Bank of China, visited Gwadar this weeks to review progress on CPEC projects.

According to the Memorandum of Cooperation between the People's Bank of China and the National Bank of Pakistan, the People's Bank of China has authorized the Karachi branch of the Industrial and Commercial Bank of China (ICBC) to serve as the Pakistani RMB clearing bank.

The ICBC will assume supervisory and regulatory responsibilities.

Credit: Independent News Pakistan (INP) — Pak-China