Currency swap’ll reduce substandard products importation – CBN

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The Central Bank of Nigeria (CBN) said that the exchange deal concluded by Nigeria and the People's Republic of China will drastically reduce imports of counterfeit products from China.

CBA's Acting Director for Corporate Affairs, Mr. Isaak Okorafor, disclosed this yesterday in a deal to exchange a summary of naira / renminbi with stakeholders from the North Central Zone, held in Abuja. The event was attended by importers / exporters and members of the Abuja Chamber of Commerce.

Based on this transaction, China will provide Nigeria with 15 billion yuan, and Nigeria will provide N720 billion – both equivalent of 2.5 billion dollars.

"Substandard products that you see are products that are bought through unofficial channels. With this transaction, the trade will follow the formal channel. You will not see any cash. We will also work with all relevant regulatory agencies, such as SON and NAFDAC, so that imports can only be made through companies that adhere to global standards, "explained Mr. Okorafor, adding that all transactions on the black market will be completely eliminated.

He also said that the deal would help reduce the pressure on demand for the dollar and help preserve Nigeria's foreign reserve.

"China accounts for one third of our imports, which means that imports from China represent a huge burden on the foreign reserve. Thus, this currency swap will reduce the demand for the dollar for imports by at least a third, "he assured.

He also noted that this measure "will allow us to retain our foreign reserves so that investors are confident in our economy because they know that at any time they want to withdraw their money, they will always have dollars."

As early as last Friday CBN offered 69,707,333,39 yuan for the sale and short-term forwards.

Mr. Okorafor said that exercises that were in line with the CBN guidelines were intended for payment of Yunilinsky letters of credit for agriculture, as well as raw materials. He added that sales in Chinese yuan were associated with a combination of spot and short forwards arising from applications received from authorized dealers.

In his speech, the president of the Abuja Chamber of Commerce, Prince Adetocumbo Kayode, said that attracting the attention of stakeholders to the deal would affect the use of the currency swap opportunities.

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