Bank of China, SBP sign agreement to assist enterprises in conducting cross-border transactions.

BEIJING -- China's central bank has signed an agreement with the State Bank of Pakistan to establish RMB clearing arrangements in Pakistan.

According to a statement on the People's Bank of China website, these arrangements will assist enterprises and financial institutions in both countries in conducting cross-border transactions using the RMB. They will also facilitate bilateral trade and investment, according to the bank.

At present, the emerging markets demonstrated a low elasticity of demand for US dollars. The currencies of developing countries will inevitably depreciate as a result of a possible negative spillover effect caused by a surge in USD interest rates and a monetary tightening cycle, China Economic Net (CEN) reported.

As per a report titled "2022 RMB internationalization report", conducted by the bank of China, about 78.8% of the surveyed global industrial and commercial firms are thinking about adopting RMB or growing its [RMB] share in cross-border transactions. According to SWFIT data, in 2021, RMB made up 2.7% of all currency payments made by nations, recording an increase of 1% over the previous five years.

Since the global COVID-19 pandemic, the RMB declined less than other major currencies other than the US dollar. The Japanese yen has decreased 48% from its peak since the pandemic, while the euro has decreased by 22%, following a 27% decrease in the UK pound, and the Korean...