Currency Swap Deal: Hope For Nigerian/Chinese Businesses

'Dotun Akintomide
Writer
new-diplomat default image
new-diplomat default image

Ad

María Machado Dedicates Nobel Peace Prize to Trump

By Abiola Olawale María Machado, a Venezuelan democracy activist and winner of the 2025 Nobel Peace Prize, has dedicated her award to the President of the United States, Donald Trump. This comes after the Norwegian Nobel committee announced that Machado has clinched the 2025 Nobel Peace Prize, a decision the White House protested as “political”.…

“Don’t Rush to Confirm Amupitan’s Nomination as INEC Chairman,” PDP Tells Senate

By Abiola Olawale The Peoples Democratic Party (PDP) has called on the Senate to apply a measured approach for the confirmation of Professor Joash Ojo Amupitan as the new Chairman of the Independent National Electoral Commission (INEC). The PDP's statement, issued Friday by its National Publicity Secretary, Debo Ologunagba, warned against hasty approval of President…

Jonathan Set to Meet Tinubu over Possible Release of Nnamdi Kanu

By Abiola Olawale Human rights activist and former presidential candidate, Omoyele Sowore has disclosed that former President Goodluck Jonathan is reportedly set to engage President Bola Tinubu on the continued detention of the leader of the Indigenous People of Biafra, Nnamdi Kanu. Sowore made this known following a meeting with Jonathan in Abuja on Friday,…

Ad

By ‘Dotun Akintomide

The signed a $2.5 billion bilateral currency swap between Central Bank of Nigeria (CBN) and the Peoples Bank of China (PBoC) will provide naira liquidity to Chinese businesses and provide RMB liquidity to Nigerian businesses respectively.

The transaction which is valued at Renminbi (RMB) 16 billion, or the equivalent of about $2.5bn is targeted at improving the speed, convenience and volume of transactions between the two countries

Confirming the swap, which has taken two years to negotiate, a statement
released Thursday by CBN spokesman Mr. Isaac Okorafor said the Governor of the CBN, Mr. Godwin Emefiele, led CBN officials while PBoC Governor, Dr. Yi Gang, led the Chinese team at the official signing ceremony in Beijing on Friday, April 27.

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

News on the swap comes at a time Nigeria’s foreign reserves have inched up to $48 billion on higher oil prices, giving the country leverage in its negotiations with the Chinese central bank.

“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,” CBN said in a statement.

It added that as the deal comes into effect, Nigerian manufacturers, cottage industry players and anyone who need imports from China will be able to secure RMB from Nigerian banks: “With the operationalization of this agreement, it will be easier for most Nigerian manufacturers, especially small and medium enterprises (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 scarce foreign currencies.”

The CBN listed benefits of the deal to include helping both to manage their reserves better among other benefits: “It will also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries.”

Ad

Unlocking Opportunities in the Gulf of Guinea during UNGA80
X whatsapp