CBN Signs Currency Swap Agreement with the People’s Bank of China (Press Statement)

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CBN Signs Currency Swap Agreement with the People’s Bank of China (PBoC)

The Central Bank of Nigeria (CBN) wishes to announce the execution of a bilateral currency swap agreement with the Peoples Bank of China (PB0C). The Governor of the CBN, Mr. Godwin Emefiele, led CBN officials while PBoC Governor, Dr. Vi Gang, led Chinese team at the official signing ceremony in Beijing, China, on Friday 271 April 2018, a culmination of over 2 years of painstaking negotiations by both Central Banks.

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The transaction which is valued Renminbi (RMB) 16 billion, or equivalent of about $2.5bn, is aime providing adequate local currency liquidity to Nigerian and Chinese industrialists other businesses thereby reducing difficulties encountered in the search third currencies.

Among other benefits, this agreement will provide Naira liquidity to Chinese businesses and provide RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience and volume of transactions between the two countries.

It will also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries.

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With this agreement, it will be easier for Nigerian manufacturers, especially SMEs to import raw materials, spare-parts & simple machinery by taking advantage of available RMB liquidity from Nig banks without being exposed to the difficulties of seeking other foreign currencies.

The deal will also make it easier for Chinese manufacturers seeking to buy raw materials from Nigeria to obtain enough Naira from banks in China to pay for imports from Nigeria. The deal will protect Nigerian business people from the harsh effects of 3rd currency fluctuations.

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