Buhari did not sign currency swap deal with China - Minister
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Buhari did not sign currency swap deal with China – Minister

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Is currency swab Buhari’s magic wand for the economy?

The Federal Government has denied that President Muhammadu Buhari signed a currency swap deal with the Chinese government during his recent trip to China.

This was disclosed by the Minister of Foreign Affairs, Mr. Geoffrey Onyema, who said that the President sought ways of partnering with the Chinese government to trade on their local currency.

The minister, who also said Nigeria stood to benefit from the anticipated $6bn investments from China, as more jobs would be created for the youths, ruled out any provocation or face-off between Nigeria and the West over the partnership.

“It’s not really a swap. What it takes is that as the Chinese economy goes strong, there is some pressure on them from the trading partners, international financial institutions. They agreed that the money should be internationalized.

”So, they started that for a while. They were protecting it also. They did not allow it to be fully exchangeable. But now, their economy is fully strong, they are looking for a way to internationalize the currency. Now, they were saying essentially that they wanted to segment it.

“For Southern Africa, South Africa is going to be the sort of a hub for the currency. So, they are going to be the focal point for the Chinese to make that available for trade in that area.

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“In west Africa, they are looking for a hub. Ghana is interested in being the hub for the currency to circulate for those who want to use it. It is not compulsory but Nigeria is a bigger country with bigger economy.

‘’So that does make sense. And they became a kind of attracted to Nigeria to be the hub. So, for us, the benefit is that it gives us small flexibility.

“So, if Nigeria is buying Chinese goods, for instance, it will be in our interest to use the Yuan because we know there is a lot of squeeze for the dollar. But we’ll still use the dollar. But if it is not enough and there are some people who want to invest in the country, instead of crying that they cannot take dollar out, there might be Yaun that they would be happy to take out because it is now internationalized as a currency and they can use it. So, it gives us a much larger option.

“As you know, a lot of importers now are complaining that they are not able to access the dollar to buy goods and things like that. So, if we have in addition to dollar, Yaun, then they can also have it.’’

 

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