KARACHI: In a landmark move, a bilateral Currency Swap Arrangement (CSA) has been signed between State Bank of Pakistan (SBP) and the Central Bank of the Republic of Turkey (CBRT). The CSA signing ceremony was held in Istanbul, Turkey on Tuesday. The agreement was signed by Governor SBP Yaseen Anwar and Governor CBRT Erdem Basçi in presence of President Asif Ali Zardari and Turkish President Abdullah Gul.
The bilateral CSA has been concluded in Pakistani Rupee/Turkish Lira with a size amounting to US $1 billion. Core objective of the CSA, which will remain valid for three years, is to finance bilateral trade in respective local currencies of the two countries. This is a "landmark" transaction executed between the two central banks and is the first time either country has executed such an arrangement.
"We expect that bilateral trade will grow as a result of this agreement, further augmenting the economic relations between Pakistan and Turkey," said both the governors of central banks of the two brotherly countries. The agreement between the two central banks will give positive signal to the market on the availability of liquidity of the other country's currency on the onshore market. As a result it will promote bilateral trade denominated in Turkish Lira and Pak Rupee.
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