Resolving the lingering Naira-Yuan swap deal is one of CBN’s strategies to reduce the huge dollar demand and pressure on the local currency, News agency of Nigeria reports.
Nigerian officials and those from China are currently meeting to fine tune the deal, CBN Governor Godwin Emefiele, said.
According to the Guardian newspaper, Emefiele gave the indication at the ongoing International Monetary Fund/World Bank Group yearly meetings in Washington DC.
IMF and World Bank Are Part Of The Naira-Yuan Deal
According to Emefiele, there is a lot of “networking meetings going on, and I can assure you that meetings are going on with some of our partners, particularly, China.”
There would be positive outcome, according to Emefiele. Some of the meetings included the Managing Director of IMF as well as the World Bank Group.
“I believe in the course of time, we would achieve it. Nigeria happens to be one of the foremost countries in the world that adopted the Remimbi as a reserve currency.
“We would work with China, to ensure that we get our fair share of benefit from this arrangement,” he said.
The deal will assist in easing the pressure on Nigeria’s foreign exchange, foreign exchange reserve which has been declining rapidly.
From a peak of over $50 billion during former president Olusegun Obasanjo’s era a few years ago, when crude oil was selling at over $100 per barrel. Its is now presently at a low of about $25 billion as oil price hovers around $50 per barrel.
China has Yuan swap arrangements with 28 countries worldwide. Some these countries include financially sound nations like the Kingdom of Great Britain and Australia.
Basically, the Naira/Yuan currency swap would allow Nigeria to directly borrow Yuan and lend naira for purchases from China. This move will short-circuit the process of converting the Nigerian currency to dollar before further conversion of the dollar to Yuan.