Japan Bank of International Cooperation (JBIC) has agreed to extend a long-term credit line to National Bank of Pakistan (NBP) with the specific aim of boosting letter of credit (L/C) transactions between the two countries.

The JBIC facility also aims to enhance Japanese exports to Pakistan by offering Pakistani importers easier access to funds for purchasing goods and services of Japanese origin.

Guarantees

A press note issued by NBP said JBIC would guarantee L/Cs issued by NBP under a short-term trade facility for encouraging trade through L/Cs between the two countries.

A memorandum of understanding (MoU) to this effect was signed earlier this month at the 40th annual meeting of the Board of Governors of the Asian Development Bank in Kyoto, Japan.

More cooperation

The MoU also envisages more cooperation between JBIC and NBP to promote exchanges of information in respect of Islamic financing.

JBIC is already providing financial assistance to Pakistan, including some US$207 million in preferential loans to finance major projects such as the construction of a highway connecting rural areas with Karachi and a major power transmission project.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.