Nigerian naira, or vice versa , in the next three years , the People’ s Bank of China ( PBOC ) said on its website .
The move is aimed at facilitating bilateral trade and investment and promoting the financial stability of both sides, the PBOC said . The deal can be extended by mutual consent.
A currency swap deal allows two institutions to exchange payments in one currency for equivalent amounts in the other to facilitate bilateral trade settlements and provide liquidity support to financial markets .
NAN reports that in 2014, the CBN’ s deputy governor , Kingsley Moghalu, said the bank was looking to increase the percentage of Yuan foreign reserves in its possession from two per cent to seven per cent.
According to him , 85 per cent of its foreign reserves were in dollars and it needed to have more in Chinese Yuan, as the country was taking a more important place in global trade .
“ It was clear to us that the future of international economics and trade will shift in large part to business with and by China . Ultimately the renminbi ( Yuan ) is likely to become a global convertible currency, ” Moghalu said .
Since 2014, the world market has recognised the Yuan as a likely global reserve currency, a replacement for the dollar, which has led countries like Ghana, South Africa and Zimbabwe to integrate the renminbi ( Yuan ) into their financial markets .
As a result of this , trade ( however imbalanced ) has increased between certain countries on the continent and China, as well as providing a fertile ground for demand for the currency on the continent.
GUYS, WHAT DO YOU THINK?
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FACEBOOK COMMENTS
View previous comments…Endy Edeson
@Treasure; A currency swap, sometimes referred to as a cross-currency swap, involves the exchange of interest and sometimes of principal in one currency for the same in another currency. Interest payments are exchanged at fixed dates through the life of the contract.
Endy Edeson
Aristos, Currency swap is fixated or fixed for a particular amount of years. This is a 3 years deal. That of GEJ i think has expired
Frank Imeh
good i have been waiting for ds for long, instead of dollars, nw its yuan. eve since v knwn buhari ds is the first tin he will do dat benefit me as an individual. Thank u oooooo mr presi.
Aniebonam Ify
Thank God for this one but still we want to change the change everyone get your PVC or tvc abeg