by admin | May 25, 2021 | Corporate, Muslim World
Islamabad : Pakistan’s central bank has allowed the Chinese yuan to be used for bilateral trade and investment activities, ensuring that imports, exports and financing transactions can be denominated in the Chinese currency.
In a statement late Tuesday, the State Bank of Pakistan (SBP) stated that the Chinese yuan was an approved foreign currency for denominating foreign currency transactions in Pakistan, reports Xinhua news agency.
“SBP has already put in place the required regulatory framework which facilitates use of yuan in trade and investment transactions,” the statement said.
In terms of regulations in Pakistan, the yuan is at par with other international currencies such as US dollar, euro and the Japanese yen.
Indicating deepening economic ties between the two nations, the central bank said regarding recent local and global economic progress, specially an increase in trade and investment with Beijing under the China-Pakistan Economic Corridor (CPEC), it “foresees that yuan-denominated trade with China will increase significantly going forward; and will yield long term benefits for both the countries”.
Last month during the launch of Long Term Plan for the CPEC 2017-30, Minister for Planning and Development Ahsan Iqbal said that the government was examining a proposal to use the yuan for trade between China and Pakistan.
—IANS
by admin | May 25, 2021 | Business
Photo Credit: FinancialExpress
By Rohit Vaid
Mumbai:(IANS) Devaluation of the Chinese yuan and the Indian rupee, as also the stalled reforms process, dampened investor sentiments in the equity markets during the weekly trade ended Aug 14.
The barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) fell by 169.08 points or 0.59 percent during the weekly trade, ending at 28,067.31 points from the previous close of 28,236.39 points on Aug 7.
The S&P BSE Sensex had marginally gained by 121.83 points during the weekly trade ended Aug 7.
“The devaluation of yuan is a sign that the currency wars have started at a time when the world economy is stalling, commodities prices are falling and the Chinese markets are bleeding,” Anand James, co-head, technical research desk, Geojit BNP Paribas, told IANS.
“The yuan’s surprise devaluation also stroked fears of competitive devaluation across Asia, especially before the (US) Fed’s monetary policy decision due in September,” he added
The yuan has fallen by 4.6 percent since Tuesday, its biggest devaluation since 1994.
The devaluation, intended to boost exports, has made investment in China cheaper, thereby leading foreign funds away from India.
This also impacted the rupee, which on Thursday fell to its lowest level against the US dollar in 24 months at Rs.65.23.
The logjam in parliament and the yuan’s devaluation led the markets to lose a total of 724 points during the first three trading days of the week.
However, investors were seen hopeful of a rate-cut based on healthy macro-economic data points including Consumer Price Index (CPI), Index of Industrial Production (IIP) and Wholesale Price Index (WPI).
“The recovery was led by the 0.05 percent rise of the yuan (on Friday), after three days of depreciation instigated by the People’s Bank of China, and better than expected macro data,” Rahul Dholam, senior analyst with Angel Broking, cited to IANS.
The macro-economic data points showed a fall in India’s annual retail inflation rate to 3.78 percent in July, the annual wholesale inflation fell to (-)4.05 percent, however there was a rise in the factory output to 3.8 percent in June.
The WPI coupled with consumer price index (CPI) have pointed at a gradual reining in of prices.
The RBI has set a target for CPI inflation at 6 percent by January 2016.
On the bright side of the volatile weekly trade was the possibility that the government might extend the “Monsoon Session” or call for a “Special Session” of parliament to pass the GST bill kept investors optimistic about the future of the key economic legislation.
“The signals that are coming — like an extension of the monsoon session or a proposed special session to get the GST bill passed — are very encouraging,” Devendra Nevgi, chief executive of ZyFin Advisors told IANS.
“The India growth story is based on the ability of the government to bring in reforms. For the central bank to be able to cut rates and usher in the demand by propping-up the consumer sentiment. The lack of reforms will send a dampening signal to the rest of the world,” Nevgi elaborated.
Lately, investors have been reluctant to chase higher prices given the possibility that the reform process might be stalled due to the government’s inability to conduct business in parliament.
(Rohit Vaid can be contacted at rohit.v@ians.in)
