ISLAMABAD, May 5 (Xinhua) -- The Bank of China has officially launched its services in Pakistan for clearing and settlement mechanism of Chinese yuan (CNY) for bilateral trade, investment activities, imports, exports and financing transactions, a statement said on Saturday.

The Bank of China (BOC) had already commenced operations through its first branch in Pakistan's southern port city of Karachi in November last year.

Earlier in January, the central bank of Pakistan declared Chinese currency renminbi or yuan as an approved foreign currency for denominating foreign currency transactions in Pakistan, declaring that Chinese yuan is at par with other international currencies such as U.S. dollar, euro and Japanese yen, and other currencies.

The launching ceremony was held in Pakistan's southern port city of Karachi on Friday, which was attended by officials, several chiefs and executives from the banking industry and corporate sector.

Li Tao, country head and CEO of BOC Pakistan Operations, highlighted the global recognition, importance and increasing utilization of Chinese yuan and said that the yuan settlement amount of China's cross-border trade exceeded 4.36 trillion yuan last year.

According to the statement, the BOC serves as yuan clearing bank in France, Australia, Malaysia, Hungary, South Africa, Zambia, the United States and in several other places, occupying 11 seats in 24 clearing banks designated by the People's Bank of China.

Wang Yu, Counsel General of Chinese Consulate in Karachi, said the BOC's operations for yuan will build another financial artery in China's Belt and Road Initiative as well as the China-Pakistan Economic Corridor.

On the occasion, the BOC's staff introduced yuan products and solutions and vowed to provide prime services to governments, financial institutions, corporates as well as individuals in Pakistan, China and all countries in the world.

Pakistani bankers hoped that yuan clearing and settlement mechanism will boost the transactions, including trade settlement and direct investment with the increasing demand for yuan from enterprises and financial institutions in the two countries.

Deputy Governor of the State Bank of Pakistan Jamil Ahmad hoped that the BOC can provide liquidity in the interbank market and offer different yuan-denominated financial products to cater the need of the financial industry and the business community in Pakistan.

Hussain Lawai, head of the Institute of Bankers Pakistan, believed that the launching of yuan clearing and settlement mechanism can definitely help to enhance the cross-border trade between the two countries and consequently benefit the enterprises and banks of either side.

The yuan clearing and settlement in Pakistan will effectively reduce the exchange rate risk, which will help further reduce transaction costs, enrich investment and financing options, and better meet the needs of enterprises, individuals, and financial institutions, the statement said.

Muneer Kamal, chairman of the board of Pakistan Stock Exchange Limited and director of Engro, called on the Pakistani financial institutions and corporates to grab the chance of yuan and further improve the development of the two countries.