Pakistan open to currency diversification in trade with Russia

By Al Mayadeen English
Source: Agencies
21 Jun 2023 18:22
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Pakistan and Russia will have the opportunity to reduce their dependence on foreign currencies by launching barter trade.

A Pakistani money changer counts US dollar bills in Islamabad, Pakistan, Friday, Nov. 30, 2018 (AP Photo/B.K. Bangash)

Pakistan's Minister of Commerce Syed Naveed Qamar told Sputnik on Wednesday that Pakistan is open to using various currencies in its transactions with Russia.

This comes after Russian Energy Minister Nikolai Shulginov a week ago that Russia had begun supplying oil to Pakistan with payment in "friendly" currencies. The first batch of oil was paid in Chinese yuan, Pakistani Petroleum Minister Musadik Malik said at the time.

"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, noting that while Pakistan has historically traded in US dollars, it is now open to use a variety of other currencies.

When asked if Pakistan will resort to the use of the Chinese Yuan in future trade with Russia, the minister said: "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."

He further noted that Pakistan and Russia will have the opportunity to reduce their dependence on foreign currencies -- including the US dollar, the Euro, or the British pound -- by launching barter trade.

"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.

He also pointed out that the move would facilitate the solving of problems related to financial operations, in particular for countries that are targeted by US sanctions and are unable to access the SWIFT system, such as Russia, Iran, and Afghanistan.