CBN excludes importers of substandard products from currency swap with China

The Central Bank of Nigeria, CBN, has said importers of substandard products will not be accommodated in the currency swap agreement it signed with the People’s Bank of China (PBoC).

This was disclosed by the CBN Governor, Mr. Godwin Emefiele on Wednesday at the Currency Swap Forum for the North Central in Abuja. The forum was organized for stakeholders in the trade sector (importers and exporters) to sensitise them on the conditions and benefits of trading in the new Reminbi denominated window.

Represented by CBN’s acting Director of Corporate Communications, Isaac Okorafor, Emefiele said the swap deal had the potential to reduce importation of substandard goods, as only goods approved by regulatory bodies such as Standards Organisation of Nigeria would qualify under the agreement.

“If there is anybody that thinks he or she will collect Renminbi through this window and sell on the street, the person is sadly mistaken.

“Transactions under the deal will be done electronically and this deal is only for products that originate from China.

“It does not apply to any transaction in Asia, outside the Chinese territory,” Emefiele said.

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Also speaking at the forum, Mr Oreva Eweh, the Assistant Director, Financial Market Department, CBN, said speed and efficiency are some of the benefits of trading under the Renminbi denominated window for transactions with China.

Speaking also on documentation requirements, Mr Richard Maikai of the Trade and Export Department said: “Importers intending to import from China must obtain pro forma invoice denominated in Renminbi as part of the documents required for registration of Form M.

“Also, the foreign exchange window cannot be used for payments on transactions in which the beneficiaries are not in China.

“In addition, authorised dealers shall not open domiciliary accounts denominated in Renminbi for customers,” he said.

According to Maikai, Bureau de Change Operators were not eligible to take part in the transaction as cash transactions would not be allowed under the window.

 

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