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CPEC clout: Now, Yuan may replace US dollar in Pakistan-China trade

File photo. Photograph:( Reuters )

New Delhi, Delhi, India Dec 19, 2017, 06.05 AM (IST)

Pakistan's minister for planning and development Ahsan Iqbal said that the government was examining a proposal to replace the US dollar with the Chinese yuan for trade between China and Pakistan, the Dawn newspaper reported.

In a widely reported spat between the two countries over the China-Pakistan Economic Corridor(CPEC), China had "temporarily" stopped funding of some projects in Pakistan under the (CPEC) over "corruption" issues.

The CPEC project includes projects worth Rs 1 lakh crore. As part of the project, China is set to invest heavily in 210-km Dera Ismail Khan-Zhob road, the Khuzdar-Basima road and the remaining portion of the 136-km Karakarom Highway which is worth Rs 8.5 billion.

During the meeting which was also attended by the Chinese ambassador Yao Jing, Iqbal said Pakistani currency would be used within the country, but China desired that bilateral trade should take place in its currency - known as "Renminbi" (RMB) or yuan, Dawn said.

The minister also added that China had not stopped CPEC-related investment in Pakistan as claimed by some quarters.

The CPEC project is set to be completed in three phases ending in 2030. The Pakistan government views the project as a job creation exercise and an initiative which is likely to boost trade.

The two sides agreed to establish and improve cross-border credit system and financial services, strengthen currency swap arrangements and establish a bilateral payment and settlement system, the Pakistan newspaper reported.