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Wednesday, February 21, 2024

PAK ready to diversify currencies in transactions with Russia

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Islamabad: Pakistan is willing to use various currencies in transactions with Russia and reduce the role of dollar in bilateral trade, Pakistani Commerce Minister Syed Naveed Qamar told Sputnik.

Last week, Russian Energy Minister Nikolai Shulginov said Russia had started supplying oil to Pakistan with payment in “friendly” currencies. Pakistani Petroleum Minister Musadik Malik said the country had paid for the first batch in Chinese yuan.

“Pakistan deals with a number of currencies depending on which market we are talking about, and what is the counterpart agreement on the other side, for example, the deal with Russia on oil is based in Chinese yuan, so any hard currency which is recognized in the world is used in any kind of trading in the world,” Qamar said.

He noted that while historically Pakistan has traded in US dollars, today it also uses other currencies.

Asked whether Pakistan will use the yuan in trading with Russia in the future, the minister responded in the negative, adding that “this is an arrangement for one transaction that has taken place, so this is an option that we have, but it will not restrict us one way or the other.”

Additionally, Pakistan and Russia will be able to reduce their dependence on foreign currencies by launching barter trade, the minister said.

“Because there is no direct giving [in] the SWIFT system, we have to go through a certain process, and doing that with Russia became difficult and that is why our trade was hurting, so we allowed this facilitation, so you don’t have to use dollar or any currency when you trade goods for goods. So, at the end of the day, any barter agreement reduces the use of any currency, not only dollar, but Europe, Pound and so on,” he said.

Qamar noted that this measure would help to solve problems with financial operations, especially for countries experiencing difficulties with access to the usual banking channels such as Russia, Afghanistan and Iran.

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