Central banks of Pakistan and China have singed an agreement allowing the former to conduct investment activities in the Chinese inter-bank bond market.
The “agency agreement” on bond investment was inked formally by Governor State Bank of Pakistan (SBP) Yaseen Anwar and his counterpart from the People’s Bank of China (PBoC), Dr. Zhou Xiaochuan, during a ceremony held at the PBoC head office in Beijing, said the SBP Monday.
China’s inter-bank bond market is the largest renminbi (RMB) denominated bond market with its turnover peaking to RMB 21.4 trillion in 2011. The agreement represents the manifestation of close collaboration between PBoC and the SBP that has been built over time, added the central bank.
The agreement, it said, was also part of follow-up cooperation to the bilateral Currency Swap Agreement between the central banks of the two friendly countries.
The bank said access to the Chinese bond market would provide the necessary flexibility to the SBP in diversifying and optimal management of foreign exchange reserves in order to meet the associated objectives.
The PBoC is the monetary authority of China which issues RMB, the official currency of China. Yuan is the primary unit of renminbi which means the “people’s currency”.
China opens inter-bank bond market for SBP
