The Central Bank of Iran (CBI) and the State Bank of Pakistan (SBP) signed a Banking and Payment Arrangement (BPA) to streamline trade transactions between the two nations.
“The objective of this BPA is to provide a trade settlement mechanism to promote trade between Pakistan and Iran,” SBP said in a statement on Friday, DAWN news agency reported.
The vice governor of the CBI and Deputy Governor of SBP Riaz Riazuddin signed the agreement on behalf of their central banks.
The agreement will be used for payment of trade conducted via letter of credit in accordance with international law and regulations.
“In the next step, both the central banks will invite banks in their respective jurisdiction to act as Authorized Banks for undertaking trade transactions under this BPA,” added the statement.
The statement further added that details of the agreement will be issued by SBP.
“The State Bank of Pakistan expects that this agreement will help in strengthening trade links between the two countries,” it further said.
Speaking at a business conference with Rouhani in Pakistan in late March, Pakistani Prime Minister Nawaz Sharif said Islamabad and Tehran had signed an agreement to increase annual trade volume to $5 billion by 2021.
(Source: Tasnim, under Creative Commons licence)