05 July 2018 ( Lagos ) :Following the Central Bank of Nigeria’s (CBN) $2.5 billion currency swap transaction with the People’s Bank of China (PBOC) in May 2018, CBN officials held a town hall meeting on Wednesday in Lagos to introduce the benefits of its recent swap ahead of plans to start auctioning the Chinese currency later in July.
The apex bank is attempting to sway local businesses importing goods from China to use the yuan instead of the U.S. dollar in an effort to ease trade flows and pressure on the Naira-dollar exchange rate.
In analyst’s view, given the size of the swap compared to Nigeria’s annual imports from China (c.40% of total import bill), the primary benefits would come in terms of reducing the exchange rate risk by permitting direct Naira-yuan conversion, eliminating double transaction charges, and easing of transaction processes.
Source: Vetiva Capital Management Limited
Reporting for EasyKobo on Thursday, 5 July 2018 in Lagos, Nigeria
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