President Muhammadu Buhari and Mr. Godwin Emefiele, the Central Bank of Nigeria (CBN) Governor, have secured a currency deal with the Industrial and Commercial Bank of China Ltd.
This deal, which will crash the dollar and strengthen the Naira, is a step closer to President Buhari’s promise to maintain a very healthy exchange rate.
The agreement, secured on Tuesday in Beijing, China, will allow Nigerian traders and businesses, which imports mainly from China conclude their transactions in the Chinese currency, the Renminbi (Yuan), instead of the dollar.
Nigeria-China trades, which accounts for over 70 percent of imports into Nigeria, will also be concluded in the Yuan.
“It means that the renminbi (Yuan) is free to flow among different banks in Nigeria, and the renminbi has been included in the foreign exchange reserves of Nigeria,” Lin Songtian, director general of the African affairs department of China’s foreign ministry, told reporters in Beijing a few minutes after the agreement was signed.
It was also gathered that Nigeria would become the clearinghouse for Yuan denominated transactions for the whole of Africa following the agreement.
Lin said a framework on currency swaps has been agreed with Nigeria, making it easier to settle trade deals in Yuan. China has signed currency swap deals with countries ranging from Kazakhstan to Argentina as it promotes wider use of its Yuan.