Nigerias central bank, CBN, has started the auctioning of the Chinese yuan at an undisclosed exchange rate, according to Bloomberg.

Isaac Okorafor, CBN's spokesman, confirmed the approval and the first auction of the Chinese currency in a text message to Bloomberg on Friday, July 20, 2018.

“Governor Godwin Emefiele granted approval for the auction to take place on Friday.”

According to Bloomberg, the Central Bank asked banks to bid for renminbi between 9:00 a.m. and midday on Friday. The results will probably be announced by Monday, sources told the news platform.

On May 3, 2018, the Central Bank of Nigeria signed a bilateral Currency Swap agreement with the People’s Bank of China (PBoC) worth about $2.5billion.

ALSO READ: Nigeria's central bank wants importers to trade in Chinese Yuan to strengthen the forex market

The currency swap deal is valued at 16 billion Renminbi (RMB) and about 720 billion in Naira. The deal is expected to reduce the demand for US dollar by Nigerians importing goods from China, and consequently strengthening the value of the Naira.

The agreement will also reduce pressure on the naira-dollar exchange rate by weaning Nigerian importers off the greenback in Africa's largest economy. A dollar is currently at N360 and the country has more than 3 exchange rates.

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