Nigeria’s Central Bank (CBN) and the People’s Bank of China signed a $ 2.5 billion foreign exchange agreement on Thursday (May 3rd) to facilitate bilateral trade and investment and promote the financial stability of both parties.
The currency swap agreement allows both institutions to exchange payments in one currency for equivalent amounts in the other to facilitate bilateral trade settlements and provide liquidity support to the financial markets.
Already in 2014, former CBN vice-governor Kingsley Moghalu said the bank was seeking to increase the percentage of foreign reserves in Yuan from 2 percent to 7 percent.
According to him, 85% of its foreign exchange reserves were in dollars and it was necessary to have more in Chinese yuan, because the country occupied a more important place in the world trade.
“It was clear to us that the future of the economy and international trade would largely go to business with and through China. In the end, the renminbi (Yuan) is likely to become a global convertible currency, “said Moghalu.
