Pakistan has turned down China’s demand to allow its currency to be used in the Gwadar Free Zone under the China-Pakistan Economic Corridor framework, arguing any such move would compromise its ‘economic sovereignty’.
Pakistan conveyed its final position on the use of the foreign currency in its territory to the Chinese authorities during the Senior Officials Meeting (SOM) that was held on Monday in Islamabad, according to officials who were engaged in talks.
Planning Minister Ahsan Iqbal would take up the issue (KCR) with Vice Chairman of the National Development and Reform Commission today (Tuesday) during the JCC meeting.
“If a consensus is achieved on the KCR at the political level, only then will both the sides sign the Framework Agreement,” said the officials.
“China wants to introduce its currency in Pakistan as part of its policy to internationalise the renminbi (RMB) – the official name of its currency,” according to the Pakistani officials.
The Chinese authorities wanted to avoid currency exchange risks attached with the use of the US dollar and the Pak rupee.
The Ministry of Finance and the State Bank of Pakistan contradicted the Chinese request to permit utilization of RMB.In any case, both the sides concurred that every money related plan would be made under the current respective Currency Swap Arrangement. The present swap game plan will terminate one month from now and both the nations chose to broaden it, notwithstanding growing the present swap restrict which is equivalent to $500 million.”China needs Pakistan to acknowledge its cash request and influence it to some portion of the last draft of the Long-Term Plan (2014-2030),” said the authorities, including, “Pakistan has passed on its restriction to the request a couple of months prior yet the Chinese side squeezed it once more.”The last position was passed on Monday.”Pakistan might advance the development of the Gwadar Port Free Zone by drawing on the experience of China (Shanghai) Pilot Free Trade Zone and other Pilot Free Trade Zones in China, and investigate RMB seaward money related business in Gwadar Free Zone,” as per the first LTP draft that Islamabad sent to Beijing for reviewing in March this year.The marking of the last draft of the LTP by China and Pakistan on Tuesday (today) is as yet subject to settlement of some pending issues.Beijing additionally requested that Islamabad ought to set up the Customs Special Supervised Areas along the CPEC course for assistance of its interests in Special Economic Zones (SEZs), said the authorities.Pakistan acknowledged the request, they included.The LTP is the most basic component of the China-Pakistan monetary relationship, as it establishes the framework of participation in all monetary and money related territories for a considerable length of time to come.Arranging Minister Ahsan Iqbal has reported to make the LTP last record open after the seventh JCC meeting.