Pakistani President Asif Ali Zardari has proposed that Pakistan and Iran agree on currency swaps in order to strengthen relations.
Zardari made the proposal during his meeting in Tehran with Iranian President Mahmoud Ahmadinejad, noting that Pakistan was already discussing currency swap arrangements with Turkey, Sri Lanka and China, The News Online reported.
Zardari and Ahmadinejad discussed bilateral cooperation in the energy sector, particularly issues surrounding the construction of the Iran-Pakistan natural gas pipeline as well as supplying power from Iran to Pakistan’s Balochistan province.
The ties between Iran and Pakistan have become increasingly strong as both countries endeavor to expand their economies. In 2009 Pakistan had increased its exports to Iran by 80 percent to become an important trading partner for Iran, which could potentially become one of Pakistan’s largest export markets.
Iran is now a major energy supplier to Pakistan. Pakistan has been importing more energy than just oil and gas, as since 2005 Pakistan has been importing Iranian-generated electricity.
Pakistan is currently facing a major energy crisis, which some analysts believe may be the worst in its history and desperately needs Iranian gas. Pakistan’s Minister for Petroleum, Asim Hussain, recently said, "Our dependence on the Iran (-Pakistan) pipeline is very high. There is no other substitute at present to meet our growing demand for energy."
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com