Dar urges SCO to boost trade in local currencies

Dar urges SCO to boost trade in local currencies

Deputy Prime Minister and Foreign Minister Ishaq Dar has called on Shanghai Cooperation Organisation (SCO) members to expand the use of national currencies in bilateral settlements and establish new financial institutions to protect the region from global economic shocks.

Addressing the SCO Council of Heads of Government (CHG) meeting in Dushanbe, Tajikistan, on Tuesday, Dar stressed the need to accelerate efforts to promote transactions in local currencies and establish the proposed SCO Development Bank, Development Fund and Investment Fund.

He said these mechanisms would support development projects and help member states withstand international financial disruptions.

Dar arrived in Dushanbe a day before the meeting, which brings together representatives of the SCO’s 10 member states: Pakistan, China, India, Iran, Russia, Kyrgyzstan, Belarus, Kazakhstan, Tajikistan and Uzbekistan. Afghanistan and Mongolia hold observer status.

The CHG serves as the organisation’s second-highest decision-making body, providing direction on economic, financial, trade, connectivity and socio-economic cooperation, as well as budgetary matters.

Dar’s proposal comes as Russia and Iran face Western sanctions that limit their access to international markets and place pressure on their economies. Greater reliance on national currencies could help SCO members reduce their exposure to disruptions in the international financial system.

The initiative also builds on commitments made at the 2024 SCO Council of Heads of Government meeting hosted by Pakistan. In the joint communiqué, member states reaffirmed the importance of gradually increasing the share of national currencies in mutual settlements.

The document also stressed the need to protect the World Trade Organisation’s multilateral trading system to promote inclusive global growth, while reducing dependence on the US dollar in international trade.

During the 2024 summit, Prime Minister Shehbaz Sharif pointed to a growing consensus among SCO members on settling trade transactions in their respective currencies. He said the shift could help protect participating countries from global financial disruptions.

During his address in Dushanbe, Dar also highlighted the China-Pakistan Economic Corridor (CPEC), describing it as an opportunity for all SCO partners to participate in regional connectivity and accelerate broader economic integration.