ISLAMABAD: Pakistan has turned down China’s demand to allow its currency to be used in the Gwadar Free Zone under the China-Pakistan Economic Corridor framework, arguing any such move would compromise its ‘economic sovereignty’.
Pakistan conveyed its final position on the use of the foreign currency in its territory to the Chinese authorities during the Senior Officials Meeting (SOM) that was held on Monday in Islamabad, according to officials who were engaged in talks.
The SOM was held a day before the 7th meeting of the Joint Cooperation Committee (JCC) – the highest decision-making body of CPEC.
“China wants to introduce its currency in Pakistan as part of its policy to internationalise the renminbi (RMB) – the official name of its currency,” according to the Pakistani officials.
The Chinese authorities wanted to avoid currency exchange risks attached with the use of the US dollar and the Pak rupee.
The Ministry of Finance and the State Bank of Pakistan opposed the Chinese demand to allow use of RMB.