In a move aimed at strengthening financial cooperation and promoting bilateral trade, the People’s Bank of China has renewed its bilateral currency swap agreement with the Central Bank of Nigeria (CBN) to the tune of N3.28 trillion or 15 billion yuan, equivalent to $2.09 billion.
According to a statement on the website of China’s Central bank, the agreement, which is valid for three years and subject to renewal upon mutual consent, seeks to expand the use of the naira and yuan in business transactions between both countries and by implication, reduce dependence on the US dollar.
The deal, first signed in April 2018, involves providing naira liquidity to Chinese businesses and yuan liquidity to Nigerian businesses. This move is expected to facilitate trade and investment between the two nations, which have a significant trade relationship.
It is significant to state that China is Nigeria’s biggest trading partner, importing crude oil, petroleum gas and lead ore, among others, while Nigeria imports manufactured goods, vehicles and electronics from China.
The renewal of the currency swap arrangement is anticipated to deepen economic ties, facilitate cross-border trade, and encourage investment between Nigeria and China.
