Naira-Yuan Currency Swap Deal Renewal to Ease FX Market Pressure—Envoy

The Director-General and global liaison for NCSP, Mr Joseph Tegbe, disclosed this on Sunday, noting that the administration of President Bola Tinubu had secured a significant milestone in Nigeria’s economic development.

Mr Tegbe said the landmark deal strengthened economic ties between the two nations, facilitated bilateral trade and investment, reduced reliance on the US Dollar, and mitigated financial risks.

He stated the swap arrangement with China, worth N3.28 trillion, was a testament to the growing relationship between Nigeria and China, with trade value hitting N7.38 trillion as of June 2024.

The deal makes China Nigeria’s number one trading partner, and the partnership is expected to boost bilateral trade and investment and create new opportunities for economic growth and development.

Originally signed in 2018 under the Muhammadu Buhari administration, the currency swap agreement allows for the direct exchange of the Chinese Yuan and Nigerian Naira.

It reduces reliance on the US Dollar and lowers transaction costs in trade between the two nations.

The renewal comes as Nigeria seeks to stabilize its currency, the Naira, which has faced significant depreciation following reforms by the Tinubu administration in 2024.

By increasing access to the Yuan, the currency swap is expected to reduce pressure on Nigeria’s Dollar reserves and bolster its trade position with China.

Mr Tegbe said the currency swap agreement was a crucial step towards achieving the goals, and it signified a deeper financial collaboration between the central banks of the two countries, enhanced financial market stability, and provided businesses with more financing options and convenience.

He added that by enabling direct settlement of transactions in CNY and NGN, Nigerian businesses will benefit from lower transaction costs and reduced exchange rate risks.

He said the establishment of NCSP had been instrumental in fostering bilateral relations and promoting partnerships between the two nations. He said it underscored the premium the president placed on a comprehensive strategic partnership with the People’s Republic of China.