Nigeria: Central Bank chooses yuan for imports with China

The Central Bank of Nigeria (CBN) has appealed to local businesses to use the yuan instead of the dollar in their imports of goods from China to support the naira and increase reserves.
In fact, in May 2018, the issuing institution signed an agreement with the People’s Bank of China to facilitate trade between the two countries and strengthen the management of foreign exchange reserves, making Nigeria the third country in Africa ( after South Africa and Egypt) to sign such an agreement.
Thus, the agreement will serve to reduce the use of the dollar and, as such, reduce the pressure on the naira-dollar exchange rate, the dollar being the main commercial currency of Nigeria.
“The Central Bank will encourage users who import goods from China to use the yuan and not the dollar. The burden of dollar demand from trade with China will be lifted from our foreign exchange reserves and initial transactions in yuan could be minimal, “she said.
To date, Nigeria’s merchandise imports from China reached nearly $ 2 billion last year, compared with nearly $ 500 million imported by the Chinese, according to CBN figures.
However, economists still skeptical that the currency exchange aggravates the deficit and trade balance.