The Central Bank of Nigeria (CBN) and the Industrial and Commercial Bank of China Ltd (ICBC) have signed an agreement that will ease yuan transactions in Nigerian banks.
Lin Songtian, ICBC director-general of the foreign ministry’s African affairs department, confirmed this to reporters on Tuesday, saying the Chinese currency will be included in Nigeria’s foreign reserves.
“It means that the renminbi (yuan) is free to flow among different banks in Nigeria and the renminbi has been included in the foreign exchange reserves of Nigeria,” Reuters quoted him as saying.
CBN has said it plans to diversify the foreign exchange reserves away from the dollar by switching a stockpile into yuan, underlining the momentum behind Beijing’s drive to internationalise its currency.
Nigeria converted up to a tenth of its reserves into yuan five years ago. Now the government is considering issuing Panda bonds to help fund a record budget as Africa’s biggest economy suffers a slump in global oil prices, which has slashed revenues.
Songtian said a framework on currency swaps has been agreed, with Nigeria making it easier to settle trade deals in yuan.
China has currency swap deals with countries ranging from Kazakhstan to Argentina and New Zealand.
Meanwhile, President Muhammadu Buhari attended the official opening ceremony of the business forum on China-Nigeria production capacity cooperation holding in Beijing.
At the official opening of the forum were Xu Shaoshi, chairman of National Reform and Development Commission; Zheng Zhijie, governor of National Development Bank, and Qian Hongshan, assistant manager of foreign affairs.
On the Nigerian side were Okechukwu Enemalah, minister of industry, trade and investment; Geoffrey Onyeama, minister of foreign affairs; Babatunde Fashola, minister of works, power and housing; and Babagana Monguno, national security adviser.
