Turkey's efforts to promote the use of national currencies in trade with its main trade partners have found support from China once again. Chinese Government Special Representative and Deputy Foreign Minister Le Yucheng said China is poised to compose a positive policy environment to make trade transactions in national currencies and facilitate the use of national currencies in bilateral trade, which will ease commerce and mutual investments.
In his capacity as the special representative of the Chinese government, Le visited Ankara last week and met with Vice President Fuat Oktay, Foreign Minister Mevlüt Çavuşoğlu and Treasury and Finance Minister Berat Albayrak. There they discussed the acceleration of the topic agreed by President Recep Tayyip Erdoğan and his Chinese counterpart Xi Jinping.
Le expressed China's strong support for Turkey's call to use national currencies in bilateral trade as it will reduce costs and risks ensuing from the exchange rate, emphasizing that Turkey and China have great economic development potential as the two important emerging markets.
The Chinese envoy stressed that the yuan is the second largest currency used in China's overseas revenues and expenditures and the sixth largest reserve currency in global current accounts. He also emphasized that the yuan follows a positive trend in its efforts to become a global trading currency.
The Central Bank of the Republic of Turkey (CBRT) made the first currency swap transaction with the People's Bank of China (PBOC) in late 2016. The currency exchange agreement aims to ensure current account balance between the two countries and the use of national currencies in trade and investments.
Moreover, the Turkish Treasury took action in February to investigate the possibility of issuing bonds in the Panda market. Assets that foreign institutions issue in yuan in China to meet their financing needs are called "Panda Bonds."
In this context, Bank of China Turkey Inc., the Turkish subsidiary of the Bank of China, announced last month that it was assigned to issue Chinese-yuan denominated bonds. The size of these bonds reached $24 billion as of May this year.
"Recently, the Turkish government have taken effective measures to stabilize the value of the Turkish lira and the country's economic and social development continues to advance on track," Le said.
He also underscored that Turkey is strategically important for the region and the Islamic world as well as it is an important emerging market, therefore a significant part of the Belt and Road Initiative, multinational development project announced by Chinese President Xi in 2013.
Turkey and China signed a memorandum of understanding on the harmonization of Silk Road Economic Belt and 21st Century Maritime Silk Road with the Middle Corridor. Right now, the two sides established working groups and plan to hold a joint working group meeting to realize the cooperation projects.
Turkey's efforts to use national currencies in trade with main partners Russia and Iran have also recently accelerated, Central Bank of Iran Governor Abdolnaser Hemati said following a recent trilateral summit in Tehran, in which President Erdoğan, Russian President Vladimir Putin and Iranian President Hassan Rouhani participated in on Sept. 7.