The governor of the Central Bank of Nigeria and the Chinese equivalent both signed the agreement, he said. (Letter from Chijioke Ohuocha Schnitt by Gareth Jones and Raissa Kasolowsky) Nigeria and China have concluded a foreign exchange system between the reserve banks of the two countries. The Peoples Bank of China (PBOC) published it in a statement published on its website. Governor Godwin Emefiele signed on behalf of the CBN, while Governor Yi Gang signed on behalf of the PBOC. Despite the concerns expressed, we believe that the Currency Swap Treaty is a step in the right direction. The decline in dollar demand, which must be achieved through the swap agreement, will complement CBN`s current intervention through the investor and exporter exchange window to deepen market stability by limiting the impact of dollar shortages and exchange rate volatility. We also note that the NGN/CNY swap agreement will be particularly favourable to Nigeria`s foreign exchange reserves, which have been increasing steadily since some degree of stability returned to the country`s daily crude oil production and international oil prices triggered a northern movement. Nigeria added the yuan in 2011 as part of its monetary reserve and entered into a swap agreement with Industry and Commercial Bank of China Ltd (ICBC), the world`s largest lender, in 2016. The current annual import bill for Nigerian companies importing goods from China is NGN 1.7 trillion, meaning that the NGN 720 billion swap agreement can only cover about 15% of Nigeria`s total imports from China. The remaining 85% will certainly need US dollars. Despite the concerns expressed, most analysts believe that the fund-exchange agreement is a step in the right direction. The businessman advised the high-level bank to deepen the currency exchange pact with China and diversify commodity exports to the United States in order to diversify foreign exchange income for the country. During the second week of trading this month, the exchange rate continued at as low as CNY1/N46, showing a clear appreciation of the naira against the Chinese currency under the agreement.
Analysts say Nigeria`s signing of a new monetary swaquage agreement with China will strengthen financial stability and promote greater economic cooperation between Africa and China. Nigeria is the third African country to sign a swap agreement with China, after Egypt and South Africa. In this context, the Central Bank of Nigeria (CBN) has concluded a bilateral currency exchange agreement (BCSA) with the People`s Bank of China (PBoC). The agreement was finally signed on Friday, April 27, 2018, making Nigeria the third African country to have a monetary sweapage agreement with the People`s Bank of China. Trafigura has presented the swap agreement to the Nigerian House Committee on Petroleum Resources (Downstream) on numerous occasions. All verification and presentation was considered complete and beyond subsequent investigations. As part of the ongoing review, Trafigura was asked a number of questions regarding tax obligations. Since the inception of the BCSA, there have been differences of opinion on the implementation of the agreement.
Billy Gillis-Harry, the chairman of the South-South coalition of the House under the terms of the swap last May, the central banks will exchange N720 billion ($2 billion) and Rmb 15 billion ($2.2 billion) over three years. The first swap plans began in 2011, when Sanusi Lamido Sanusi was governor of the Central Bank of Nigeria. After the fall in the price of crude oil in 2014, dollars fell thinner and swap projects were taken over in 2016 by Sanusi`s successor, Governor Godwin Emefiele. Earlier, the Central Bank of China said it had signed a bilateral agreement with Nigeria of 15 billion yuan for a three-year currency exchange. LAGOS, May 21 (Xinhua) — The Nigerian government has been advised to use the monetary sweapage agreement with China to strengthen the local naira currency.