Nigeria, China Renew Currency Swap Agreement For Three Years

Nigeria and China have renewed their bilateral currency swap agreement, extending the deal for another three years, with provisions for further renewals upon mutual consent.

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EKO HOT BLOG reports that the Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, shared the development via social media, citing a confirmation from the People’s Bank of China on Friday.

The renewed agreement is valued at 15 billion yuan (approximately 2.09 billion U.S. dollars or 3.28 trillion Nigerian naira). According to the People’s Bank of China, the arrangement aims to strengthen financial cooperation between the two nations, expand the use of their currencies, and facilitate bilateral trade and investment.

This agreement was initially signed in 2018 after two years of negotiations between the Central Bank of Nigeria (CBN) and China’s central bank. The deal was originally valued at approximately $2.5 billion, targeting enhanced local currency liquidity for industrialists and businesses in both countries.

The currency swap arrangement is designed to ease the reliance on third-party currencies for trade and transactions, thereby simplifying bilateral trade processes, boosting investment, and contributing to the financial stability of both nations.

The renewal reaffirms the growing economic ties between Nigeria and China and highlights their shared commitment to fostering trade efficiency and reducing the challenges associated with foreign exchange constraints.

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