The Central Bank of Nigeria (CBN) and the People’s Bank of China (PBOC) have renewed their currency swap agreement, valued at N3.28 trillion (approximately 15 billion yuan or $2.09 billion), as announced on Friday. This renewal highlights both nations’ dedication to enhancing economic relations and facilitating smoother financial transactions.
This agreement, effective for three years, includes the possibility of further renewals based on mutual agreement. It has been beneficial for both countries, allowing for easier transactions in Nigerian naira and Chinese yuan, thereby decreasing reliance on third-party currencies like the U.S. dollar.
The PBOC stated that the renewed deal is anticipated to significantly strengthen bilateral trade and investment. It offers businesses in both countries greater access to local currencies, which will lower transaction costs and streamline trade operations. This initiative is in line with the broader objective of increasing economic cooperation between China and Nigeria, two nations with strong commercial and diplomatic ties.
Moreover, the agreement reflects a strategic move to promote the internationalization of the Chinese yuan while also enhancing the stability of the Nigerian naira in global financial markets.
This collaboration is part of a wider trend among countries seeking alternatives to conventional trade settlement methods, contributing to a more inclusive and diversified global financial system. Through these efforts, both nations aim to foster an environment that supports sustainable economic growth and development.
