Prof. Akpan Ekpo, an economist, has encouraged the Central Bank of Nigeria (CBN) to take the currency exchange arrangement with the People’s Bank of China (PBoC) seriously in order to lessen dependency on dollars for commerce.
Ekpo, a former Director-General of the West African Institute for Financial and Economic Management (WAIFEM), made the suggestion on Saturday in Lagos while speaking with the News Agency of Nigeria (NAN).
“Now is the time to put the Nigeria-China currency swap into action so that we don’t put all of our eggs in one basket.”So, when interacting with China, Nigerians should use Chinese money or naira rather than the dollar or euro; this will relieve pressure on the dollar or pound.
“Now is the time to take it seriously; the Federal Government signed the agreement; it was done quickly, and then we didn’t know what happened next.”
“Looking at the global trend, emerging markets are attempting to trade with bilateral currencies in order to reduce the importance of the dollar, euro, or pound because these currencies are not theirs and cannot be printed.” So, if we can finally execute the Chinese-Naira exchange, it will be extremely beneficial to corporate commerce.”
According to the expert, growing inflation is also tied to the exchange rate: “if any businessman spends more naira to buy dollars and does not know what the cost will be the next time, he will jerk up the price.”As a result, inflation would be automatic as businessmen continue to utilise more naira to acquire dollars.”
According to NAN, the CBN concluded a currency swap agreement with the PBoC in May 2018 for RMB 16 billion (about $2.5 billion). Godwin Emefiele, the suspended CBN Governor, and Yi Gang, the former PBoC Governor, signed the exchange agreement.
The agreement was intended to supply Chinese and Nigerian currency to industrialists and other enterprises in both nations.The deal, according to the top bank, would offer naira liquidity to Chinese firms and RMB liquidity to Nigerian enterprises, enhancing the speed, ease, and volume of transactions between the two nations.