CBN Trying to Convince Nigerian Importers to Use Chinese Yuan Instead of Dollar

The Central Bank of Nigeria (CBN) is trying to convince importers of goods from China to use the Yuan instead of the dollar.

This follows the bank’s move to promote naira exchange rate and boost foreign reserves.

CBN officials have been holding town hall meetings with businesses in Lagos, Aba and other cities to introduce the Yuan ahead of plans to start auctioning the Asian currency later this month.

“The Central Bank will encourage users importing goods from China to use the yuan and not the dollar,” officials said.

“Dollar demand burden arising from trade with China would be lifted from our foreign exchange reserves,” they said, adding that initial Yuan trades could be small.

In May, the CBN signed a $2.5 billion currency swap arrangement with the People’s Bank of China (PBOC). Officials said the deal is aimed at reducing reliance on the dollar and “as such reduce the pressure on the naira-dollar exchange rate.”

Under the swap arrangement, the CBN would hold N720 billion in an account in favour of the PBOC while the Chinese central bank would hold 15 billion yuan, implying an exchange rate of N48 to the yuan.

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