JUST-IN: Nigeria, China Renew N3.28trn Currency Swap Deal
Nigeria has successfully renewed its bilateral currency swap agreement with China, a significant move highlighting the strengthening of financial and economic ties between the two countries.
The Central Bank of Nigeria (CBN) and the People’s Bank of China (PBOC) announced the renewal on Friday, with the new agreement valued at N3.28 trillion (approximately 15 billion yuan or $2.09 billion). This agreement, valid for three years, retains an option for renewal based on mutual consent between both central banks.
The currency swap deal has proven instrumental in simplifying financial transactions, particularly for businesses engaged in trade between the two nations. By facilitating exchanges between the Nigerian naira and the Chinese yuan, the agreement reduces the reliance on third-party currencies like the U.S. dollar.
The People’s Bank of China stated that the renewal is expected to significantly enhance bilateral trade and investment. It is seen as an effort to make transactions more efficient by providing businesses access to local currencies, ultimately reducing transaction costs and streamlining trade processes.
This move is part of a broader objective to bolster the internationalisation of the Chinese yuan while also stabilising the Nigerian naira in global financial markets. As more countries explore alternatives to traditional trade settlement methods, this currency swap agreement between China and Nigeria is a strategic step toward fostering a more diverse and sustainable global financial system.
In summary, the renewed currency swap agreement reflects a continued commitment from both nations to deepen their economic collaboration, driving growth and development in both economies.
