China Backs Nigeria’s Plan To Increase Currency Swap Line – Issue Panda Bonds

Chinese government has said it is in support of Nigeria’s request to increase its currency swap line and its plan to issue panda bonds.

Gatekeepers News reports that Wang Yi, Chinese foreign affairs minister disclosed this while addressing the press after meeting with President Bola Ahmed Tinubu at presidential villa on Thursday.

A currency swap line is an agreement between two central banks to exchange currencies. Panda bonds are securities denominated in Chinese Yuan (renminbi) and issued by a foreign company in China.

China and Nigeria recently renewed their currency swap agreement, valued at 15 billion yuan (approximately $2 billion) to enhance trade and investment between the two nations.

The agreement which will be valid for three years, is aimed at strengthening financial cooperation and promoting the use of both currencies in bilateral transactions.

Yi said the currency swap agreement shows how well the two countries have carried out their financial cooperation and sustained its momentum.

He said, “As with regard to Nigeria’s wish to increase the line of the currency swap we will favourably study and consider the issue, our cooperation is going well in many ways, in terms of finance.”

“For instance, we welcome the panda bonds to be issued. We welcome Nigeria to issue panda bonds in China, because we have full confidence in Nigeria’s credibility.”

“And by issuing panda bonds, Nigeria will gain good revenue and the safety is guaranteed through financial support. We are working to contribute to Nigeria’s infrastructure development, in particular, railway.”

“Just a few days ago, Chinese banks supported, through financial funds, the building of phase three of the railway modernization project, and it has been delivered. So there are many details that are taking place between our cooperation.”