Nigerian businessmen dealing with Chinese won’t need Dollars as CBN signs $2.5billion swap deal with China

A bilateral currency swap agreement between the Central Bank of Nigeria (CBN) and the Peoples Bank of China (PBoC) has taken place to ensure ease of doing business with both countries.

  • Nigerian and Chinese companies will no longer require Dollars as trade between both countries will be supported by Renminbi (RMB) .

These are good times for Nigerian and Chinese companies as trade between both countries will no longer require Dollars.

The good news is coming after the execution of a bilateral currency swap agreement between the Central Bank of Nigeria (CBN) and the Peoples Bank of China (PBoC).

The governor of Central Bank, Godwin Emefiele has signed the currency swap agreement on behalf of Nigeria with Yi Gang, the governor of Peoples Bank of China on behalf of China.

The currency swap deal, which has taken two years of negotiation, is valued at 16 billion Renminbi (RMB) which is an equivalent of $2.5billion.

Speaking on the agreement, Isaac Okorafor, CBN spokesman said: “The deal, which is purely an exchange of currencies, will also make it easier for Chinese manufacturers seeking to buy raw materials from Nigeria to obtain enough naira from banks in China to pay for their imports from Nigeria. Indeed, the deal will protect Nigerian business people from the harsh effects of third currency fluctuations.”

With currency swap deal, Nigeria becomes the third African country to have such an agreement in place with China.

Effect of $2.5billion currency swap deal

After the agreement signing, the deal will provide the Chinese and Nigerian currencies directly to industrialists and other businesses from both countries.

The agreement will also reduce the difficulties acquiring third currencies - Dollars, Euros and Great Britain Pounds - according to the CBN spokesman.

Okorafor further said: “Among other benefits, this agreement will provide naira liquidity to Chinese businesses and provide RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience, and volume of transactions between the two countries.

“It will also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries.”

Okoroafor also said the currency swap deal will be easier for most Nigerian manufacturers, especially SMEs and cottage industries in manufacturing and export businesses, to import raw materials, spare-parts and simple machinery to undertake their businesses by taking advantage of available RMB liquidity from Nigerian banks without being exposed to the difficulties of seeking other scare foreign currencies.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Inside the most expensive school in Ghana where kindergarten costs GHc176K a year

Inside the most expensive school in Ghana where kindergarten costs GHc176K a year

Top 10 African countries with the most expensive gas prices in 2022

Top 10 African countries with the most expensive gas prices in 2022

Top 10 African Countries with the highest inflation rates in 2022

Top 10 African Countries with the highest inflation rates in 2022

I was a one time mechanic, says Khaid as he narrates how Sydney Talker discovered him

"I was a one time mechanic", says Khaid as he narrates how Sydney Talker discovered him

When and where to watch Super Eagles of Nigeria vs São Tomé and Príncipe

When and where to watch Super Eagles of Nigeria vs São Tomé and Príncipe

Owo attack: Buhari condemns killing of worshippers in Catholic Church

Owo attack: Buhari condemns killing of worshippers in Catholic Church

BREAKING: INEC confirms Machina, denies Lawan Yobe North senatorial seat

BREAKING: INEC confirms Machina, denies Lawan Yobe North senatorial seat

Owo massacre: Amotekun arrests suspects in connection with church attack

Owo massacre: Amotekun arrests suspects in connection with church attack

APC Chairman Adamu announces Ahmed Lawan as consensus candidate

APC Chairman Adamu announces Ahmed Lawan as consensus candidate