DUSHANBE, January 26, 2016, Asia-Plus – The National Bank of Tajikistan (NBT) has received one million yuan from the People’s Bank of China and this amount will be spent to increase the country’s production capacity, the NBT head Jamshed Nourmahmadzoda told reporters on January 26.
He noted that Tajikistan and China signed the currency swap agreement for the Chinese yuan and the Tajik somoni on September 3, 2015.
“1 million yuan received under this agreement will be spent for enhancement of Tajikistan’s production sector,” Tajik central bank head said, noting that the money will be provided through the country’s lending agencies to enterprises for purchase of equipment in China.
Nourmahmadzoda further added that similar currency swap agreements had also be signed with Russia, Turkey and other trading partners of Tajikistan.
We will recall that a ceremony marking the start of the currency swap deal between China”s yuan and Tajikistan”s somoni was held in Urumqi, capital of northwest China”s Xinjiang Uyghur Autonomous Region on December 13, 2015. The deal, worth 3 billion yuan (equivalent to around 470 million U.S. dollars), will last for three years and can be extended if both sides agree.
Under the agreement, central banks of the two sides will be able to exchange a series of payments in one currency for equivalent amounts in another to facilitate bilateral trade settlements and provide liquidity support to financial markets.
China’s central bank, People”s Bank of China (PBOC), noted last September that the move also marked the latest step in China”s efforts to promote the internationalization of the yuan.
The International Monetary Fund (IMF) has announced that China”s currency, the yuan, will join the fund”s basket of reserve currencies. Currently just the US dollar, the euro, the yen and the pound are in the group. The IMF said the yuan “met all existing criteria”” and should become part of the basket in October 2016. The yuan will now make up part of the IMF”s Special Drawing Rights (SDR) – an asset created by the IMF which serves almost as a currency. China is the world”s second largest economy behind the US and asked for the yuan to become a reserve currency last year.
