26 July 2018 ( Lagos ) : The standoff between the U.S. and China continues to threaten emerging markets as well as global growth. There are concerns that China is embracing “purposeful devaluation” as a policy tool even as the Yuan slips and the Dollar strengthens amid the trade tensions. Despite accusations of currency manipulations by President Donald Trump, the Chinese government continues to deny the allegations stating that the country has no desire to boost its exports through competitive devaluation. 

Whilst the devaluation of the Yuan might be positive for the recently concluded $2.5 billion currency swap deal between China and Nigeria, it would most likely encourage more imports into the country as Chinese goods begin to appear cheaper – leading to further deterioration in the country’s trade as local industries lose competitiveness. 

Reporting for EasyKobo on Thursday, 26 July 2018 in Lagos, Nigeria

Source: Vetiva Capital Management Limited