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CBN sells $250 Million, Makes CHINESE YUAN tradable in Nigeria
Jan 7 – The CBN in its first forex interventon on 2011, sold US$ 250 Million at N149.50. However there was demand for US$ 389 Million causing a shortage of dollars keeping the dollar rate high in the parallel market. In a significant move, The CBN added the Chinese Yuan to the list of tradable currencies that can be used for trade settlement in domestic forex market. It is a good move because Nigerian trade with China is booming as almost 33% of Nigeria’s imports arise from Asia, majority of them from China.
Mr. Mohamed Abdullahi, CBN spokesman said “We have issued a circular to the banks permitting them to trade in yuan. Chine is one of the fastest growing economies and Nigeria’s trade relations with China are increasing” In 2009, Nigeria’s imports from Asia increased by 6.6%.
It is a significant development as banks in Nigeria will now be able to offer yuan accounts to their customers trading with China based companies. According to Reuters, Citibank has already opened 12 China desks across Africa to help Chinese businessmen navigate in Africa. China has also set up a free trade zone near lekki where imports will not be taxed.
Some analysts are also predicting that this may reduce the buying pressure on the US Dollar in Nigeria which in turn may help in stabilizing the Naira/Dollar exchange rates.
At 1PM in Lagos, The US Dollar was trading at N155 in parallel market. Chinese yuan was trading at N22.95. To find out latest happenings in the Nigerian financial environment, please visit www.easykobo.com everyday.
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