Nigeria and China have renewed a currency swap agreement worth $2 billion, equivalent to 15 billion yuan.
Gatekeepers News reports that the move expected to strengthen cooperation, and promote bilateral trade and investment between them.
People’s Bank of China (PBOC) confirmed this in a statement released on Friday, noting that the arrangement will be effected for another three years, with provisions for renewal by mutual agreement.
The deal allows for the direct exchange of the Chinese yuan and Nigerian naira, bypassing reliance on US dollar and reducing transaction costs in trade between the two nations.
The currency-swap framework was first established when suspended Governor of Central Bank of Nigeria, Godwin Emefiele and former Governor of People’s Bank of China, Yi Gang signed a deal valued at renminbi (RMB) 16 billion (about $2.5bn) in May 2018.
The deal was initially designed to enable industrialists and businesses in both countries to directly access yuan and naira, thereby reduce the need for third-party currencies.
Emefiele had said, “This agreement will provide naira liquidity to Chinese businesses and RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience, and volume of transactions between the two countries.”
