Using RMB/PKR in bilateral trade: PM directs SBP to hold meetings with Chinese banks

ISLAMABAD: Prime Minister Shehbaz Sharif has directed State Bank of Pakistan (SBP) to hold meeting with Industrial and Commercial Bank of China (ICBC) and Bank of China for use of RMB/ PKR for bilateral trade between the two countries, official sources told Business Recorder.

Prime Minister issued these directions to SBP during a meeting with Chinese businessmen on May 30, 2022.

He further directed all relevant Ministries/ Divisions/ Organizations to ensure that timelines given by Planning Division and agreed by Chinese companies are adhered to. In case a Ministry is unable to meet the timelines for justifiable reason, this should be communicated to the Chinese Companies, Planning Division and the Prime Minister Office before expiry of timelines.

According to sources, Finance Division has been directed to take immediate measures to address the liquidity issues of CPEC IPPs.

Prime Minister directed Secretary Power Rashid Langrial to hold meeting with power companies based on imported coal to address their specific issues and to also work out mechanism/ modalities for their conversion from imported to local coal. Security of personnel of Chinese companies operating in Gwadar shall be further strengthened, he asked.

During the meeting, it was decided that investments in solar and wind power projects, and desalination plant at Karachi shall be encouraged to save precious foreign exchange being spent on imported fuels, the sources maintained.

Issues of Chinese cos, promotion of RMB: PMO doing spadework ahead of PM’s China visit

In another meeting under the chairmanship of Prime Minister, it was decided that in view of the low efficiency of non-cogeneration Captive Power Plants (CPPs), a Committee headed by Minister for Finance shall hold deliberations with the businesses/ corporates generating electricity through non-cogeneration CPPs and work out options for diverting gas to the national security system.

Power Division, sources said, has been directed to come up with sectoral plan to improve the financial health of power sector within two weeks.

It was also decided that levy on incandescent bulbs shall be imposed/ enhanced to discourage their use. This may be accompanied by incentives to encourage use of LED bulbs, if needed.

Petroleum Division has been directed to look into the matter of injecting additional gas from Mami-Khel gas field into the system.

It was noted that the bio-monthly price determination of POL products does not envisage non-applicability of 10 per cent duty on Motor Spirit imported from China. Ministry of Finance and Petroleum Division shall immediately look into this issue so that any unfair advantage to OMCs is stopped forthwith and recovery initiated in case of past undue benefits.

The Economic Coordination Committee (ECC) of the Cabinet, in its meeting held on June 3, 2022 imposed 10 per cent Regulatory Duty (RD) on MS import from China. The decision will be ratified by the federal cabinet in its forthcoming meeting.

Prime Minister has also directed that privatisation of loss making SOEs be expedited as presently this process is very slow.

Copyright Business Recorder, 2022