January 8, 2016
President PBIF and All Karachi Industrial Alliance, Former Provincial Minister for Information Technology and First Vice Chairman of the Businessmen Panel of FPCCI Mian Zahid Hussain urged Govt. to negotiate with Chinese Govt. to start using their local currencies for mutual settlements.
He emphasized the need to devise mechanism where traders of both countries can issue invoices, cheques and letter of credits in local currencies i.e. either Pak Rupee or Chinese Yuan without accounting for impact of US Dollar. It will not only stimulate growth within country and region but will also help containing balance of payment which arise in consequence of trade deficit thus strengthening Pak rupee.
Mian Zahid Hussain told that trading in local currencies will be more appropriate and beneficial for both countries resultantly, reliance on greenback will be minimized and consequently, help to curb negative balance of trade, which is currently US$1.3 billion.
Last year Pakistan paid around US$7.5 billion to China against import of goods, while exported goods to China for US$2.6 billion. If Pakistan would have swapping arrangement with China, this shortfall of US$4.9 billion would have been bridged easily, instead of getting it financed from IMF and resultantly leading to Debt Servicing Expense to its minimum level, said President PBIF.
The Former Minister further told that in execution of currency swapping arrangement with China both countries will be on win-win position but Pakistan will have little more advantage than China since the country with weaker currency gains more. He told that having single currency for a region have been proved a faux pas with recent financial crisis in Europe and 11-years lowest Oil prices will impact US dollar near future too therefore considering growth scenario, reliance on greenback must be shifted to emerging economies.
Mian Zahid Hussain anticipated that Pakistan will emerge as intermediator and make it able to secure additional share from export of China, which is already standing at US$2.34 trillion, in response to settlement in local currency.
