CBN signs currency swap deal with China
By David Oladimeji
The Central Bank of Nigeria has signed the currency swap deal with China. With this development Nigerian importers are free to import their goods in Chinese currency equivalent. The proposal had been in the pipeline for the past two years awaiting Chinese government’s nod.
It is on record that almost 70% of the goods Nigeria imports come from China and Asia as oppose to 12% which comes from America. However Nigeria had been transacting business with China in Dollars. Henceforth instead of transacting business with dollars at N350 to a dollar to import goods from China, importers will now buy Yuan at 47 naira to one Yuan to import goods directly from the country.
Chinese Yuan is about five times cheaper than dollars.
As usual, another giant stride which has been unreported is that this development is a victory over supremacy of dollars in our daily business and economic activities.
Some businessmen and individuals who have been hoarding dollars for economy gains will be forced to release them in to prevent huge loss which might arise from the currency swap deal with China.
Seabreez predicts that Dollars and Pounds Sterling would flood the Nigeria market as the importers will draw naira from their accounts in the banks because of the opportunities arising from the ability to transact business with Chinese Yan.
Already Nigeria banks are expected to have their office branches in China even as the First Bank has already opened its in China.
Godwin Emedfiele, GBN Governor