Currency swap deal will ease pressure on Naira – Gwadebe

By Odunewu Segun

The currency swap arrangement entered into by Nigeria with China has been described as a smart move that will help stabilize the naira against the dollar.

President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadebe said the government’s effort plans to increase the availability of the Yuan is already favouring the naira against the dollar.

According to Gwadabe, since the announcement, the naira had appreciated by N10 against the dollar. Gwadabe said the dollar was now changing for N310 as against the former rate of N320 and predicted that once the policy is in force, the price of dollar will continue to fall.

He said since more than 50 per cent of foreign businesses in Nigeria is with China, the new arrangement will help the informal payment sector.

“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.”

The agreement signed during the visit of President Muhammadu Buhari’s visit to China last week will see the Yuan’s flow freely among Nigerian banks. It has also been included in the foreign exchange reserves of Nigeria, most importantly, the new deal is also likely to ease the pressure on the dollar, since demand for the Yuan will start rising.