But if the process of converting Naira directly to Yuan has been seamless and rid of bottlenecks, experts said, it will lead to reduction in the prices of goods coming from China, while lifting off the pressure from dollar, thereby, giving room for the nation’s currency to grow strength.
CBN, Nigeria’s apex bank, issued the regulations for the US$2.5 billion currency swap agreement in June the same year as the deal was signed to facilitate trade between the two countries and enhance foreign reserve management. Speaking with LEADERSHIP Sunday at the weekend, the managing director/CEO, Centre for Promotion of Private Enterprise , Dr Muda Yusuf, said: “The currency swap is about $2.5 billion equivalent of China currency, Yuan , and it is for three years. Hence, this cannot even be compared with $20 billion business volume of trade between Nigeria and China in a single year.“Talking of currency swap of just about $2.
In the same vein, the head, Retail Investment, Investment Management Group at Chapel Hill Denham, Ayodeji Ebo, stated that while the initiative was a laudable one, it has not had any major impact as it ought to. Meanwhile, a senior analyst with FXTM, Lukman Otunuga, said the deal failed to achieve its goal three years after it was launched because the same destructive forces sabotaging the Naira are still present as ever.“A terrible combination of dollar shortages, inflationary pressures, weak macroeconomic conditions, exposure to external risks, and multiple exchanges continue to weigh heavily on the local currency,” he noted.
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