From Nduka Chiejina, Abuja
The Central Bank of Nigeria (CBN) sold CNY2.6 billion in 26 auctions under the currency swap deal with China last year, according to its Financial Markets Department Annual Activity Report 2022.
The report said CNY8.45billion was sold from the beginning of the currency swap deal in 2018 last December.
The Bi-lateral Currency Swap Agreement with the People’s Bank of China began in July 2018 and expired in April 2021, but was subsequently renewed.
The deal was struck with China to improve the speed, convenience, and volume of transactions between both countries,
It was also to assist them to manage their foreign exchange reserves, enhance financial stability, and promote broader economic cooperation.
The currency swap with China was also meant to provide naira liquidity to Chinese businesses and RMB liquidity to Nigerian businesses, thereby enhancing the speed and convenience of transactions between the two countries.
According to the report, the Bi-lateral Currency Swap Agreement with the People’s Bank of China, the fortnightly auction of the Chinese yuan at the Retail Secondary Market Intervention Sales window was sustained during the year.
“Thus, CNY2,673.84 million was sold in 26 auctions, compared with CNY3,310.60 million in the preceding year.”
The report also stated that the Nigerian Autonomous Foreign Exchange Market (NAFEX) recorded a turnover decrease to $29.98billion in 2022 from $32.69billion this year.
The reason for this decrease in turnover was attributed “to reduced capital inflows into the market during the review period”.
It also noted that “from the beginning of NAFEX in mid-2017, aggregate turnover amounted to $247.59billion” at the end of last December.