Categories: Economy

CBN Signs $2.5bn Currency Swap Agreement With China

Following two years of intense negotiations, Central Bank of Nigeria (CBN) and Peoples Republic of China (PBoC) have finally signed a $2.5 billion worth of currency swap deal.

At a ceremony, which held in Beijing, China last Friday, Governor of the CBN, Mr Godwin Emefiele, led CBN officials while PBoC Governor, Dr Yi Gang, led the Chinese team.

According to a statement signed by CBN Spokesman, Isaac Okorafor, the official ceremony was “a culmination of over two years of painstaking negotiations by both Central Banks.

“The transaction, which is valued at Renminbi (RMB) 16 billion, or the equivalent of about $2.5bn, is aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses thereby reducing the difficulties encountered in the search for third currencies.”

According to Okorafor, this agreement will among others 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.

“With the operationalisation 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 deal, which is purely e foreign 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 last Friday’s agreement, Nigeria becomes the third African country to have such an agreement in place with the PBoC.

Both the Nigerian and Chinese officials expressed delight at the conclusion and signing of the agreement and expressed the hope that it would boost mutually beneficial business transactions between Nigeria and the Peoples Republic of China, Okorafor disclosed.

Recent Posts

Promotion Exam: Oyo Govt To Punish Teachers Over Illegal Fees

The Oyo State Government through the Oyo State Universal Basic Education Board has warned teachers…

3 mins ago

Delta Bloodbath: Wanted Monarch Surrenders Self To Police

The traditional ruler of Ewu-Urhobo kingdom in Ughelli South Local Government Area of Delta State,…

12 mins ago

Blackout Hits Nigeria As National Grid Collapses Again

Nigeria has been thrown into darkness yet again as the national electricity grid collapsed. The…

15 mins ago

UBA, Access, 4 Others Beat Benchmark As CBN Raises Commercial Banks Capital Base To N500bn

The Central Bank of Nigeria (CBN) has unveiled new minimum capital requirements for banks, pegging…

18 mins ago

25-Year-Old Sentenced To Life Imprisonment For Raping 10-Year-Old Boy

Justice Musa Ubale of a State High Court sitting in Jigawa on Thursday, sentenced 25-year-old…

22 mins ago

Court Acquits 23-year-old Of Rape After Two Years In Jail

A 23-year-old man, Victory Tasie, accused of raping his 19-year-old girlfriend, was on Thursday discharged…

25 mins ago

This website uses cookies.