The petroleum minister of Pakistan revealed that Islamabad used Chinese yuan to pay for its first government-to-government import of discounted Russian crude oil, marking a significant change from the country’s previous US dollar-dominant export payment strategy.
Discounted crude provides some relief as Pakistan struggles economically and faces a severe balance of payments issue that puts its foreign debt at risk of default.
The central bank’s foreign exchange reserves only cover a month’s worth of restricted imports.
The first cargo of discounted Russian crude oil arranged under a deal struck between Islamabad and Moscow earlier this year arrived in Karachi on Sunday.
On Monday it was being offloaded at the port in the southern city of Karachi.
The Minister Musadik Malik, speaking by telephone on Monday, did not disclose the commercial details of the deal, including pricing or the discount that Pakistan received, but said, the “payment [was] made in RMB”.
