The recent visit of Nigeria’s President Muhammadu Buhari to China at the invitation of Chinese President Xi Jinping, has led to improved cooperation between the two countries. One of the main deals reached between the two countries was the Renminbi (Yuan) reserve deal which will allow the Central Bank of Nigeria (CBN) to build up Chinese Yuan reserves as against the dependence on dollar dominated reserve. Our reporter observes the implication of the currency deal.
The visit witnessed the signing of several deals on cooperation. One of the key deals signed was the currency swap agreement which allows importers of goods from China to conclude their transactions in the Chinese currency, the Renminbi (Yuan), instead of the dollar.
The currency swap deal with China is developing so much excitement within the business community in Nigeria because prior to this agreement, every trade transaction between these two nations have been consummated in the US dollar.
The current fall in the international price of crude oil which accounts for over 70 per cent of our foreign exchange has taken its toll on the central bank’s ability to meet the ever growing demand for the dollar.