Since three years ago when the currency swap deal started, the Central Bank of Nigeria has reportedly sold 3.69 billion yaun to China. This was disclosed in CBN’s Financial Markets Department 2021 half year activity report.
To enhance foreign reserve management and facilitate trade between the two countries, the CBN signed a Bilateral Currency Swap Agreement with the People’s Bank of China.
The agreement which commenced in July 2018 was aimed at providing naira liquidity to Chinese businesses and RMB liquidity to Nigerian businesses, causing an improvement in volume and speed of transactions between the two countries.
The currency swap agreement allows importers of goods from China to conclude their transactions in the Chinese currency instead of the dollar.
In line with the Bilateral Currency Swap Agreement with the People’s Bank of China, the fortnightly auction of Chinese Yuan via the Retail SMIS window was sustained by the CBN.
The agreement makes Nigeria the third country to sign such a deal with China.
