President of the Association of Bureau De Change, BDC Operators of Nigeria, Aminu Gwadabe has stated that Nigeria’s plan to increase the availability of the Chinese yuan has already favored the Naira against the United States, US dollar.
Speaking with reporters in Abuja on Sunday, he revealed that since the announcement of the currency swap, the naira had appreciated by 10 naira against the American greenback.
Gwadabe explained that the dollar was now changing for 310 as against the former rate of 320 and predicted that the price of dollar will continue to fall once the policy is in force.
Stressing that this new policy will help the informal payment sector, he said: “You know more than 50 percent of foreign businesses in Nigeria is with China and before now, Nigerians doing business in China have to change their money to dollar, then from dollar to yuan.
“You can all testify to the number of made in China things in the country. So if small and large businesses can convert straight to yuan, it’s better,” he told reporters.
The Industrial and Commercial Bank of China Ltd, ICBC and the Central Bank of Nigeria, CBN, signed a deal on yuan transactions, as a way to resuscitate the current currency slump in Nigeria.
The deal meant the yuan will flow freely around Nigerian banks and will even be included in the country’s foreign exchange reserves.
Xinhua reports that since 2014 when yuan was recognized as a likely global reserve currency, Ghana, South Africa and Zimbabwe have integrated the currency into their financial markets.
Source: The Will