Nigeria agrees currency swap with China to shore up naira, help fund deficit.

Nigeria agrees currency swap with China to shore up naira, help fund deficit

  
China’s national flag is seen in front of a poster explaining the design of new 100 yuan banknote at a branch of a commercial bank at a business district in Beijing, China.

Lin said a framework on currency swaps has been agreed with Nigeria, making it easier to settle trade deals in yuan. China has signed currency swap deals with countries ranging from Kazakhstan to Argentina as it promotes wider use of its yuan.

Beijing also signed agreements to develop infrastructure in Nigeria, part of a drive to deepen its ties with Africa.

ICBC signed a $2 billion loan deal with Dangote group, the company owned by Africa’s richest man, Aliko Dangote, to fund two cement plans it plans, he told Reuters.

China’s official Xinhua news agency cited President Xi as telling Buhari that there was huge potential for economic cooperation, naming oil refining and mining.

In a speech to business leaders, Buhari said both countries wanted to work together in the areas of agriculture, fishing and the manufacturing of cars, construction materials and textiles.

Aly Khan Satchu, a portfolio manager at Rich Management, said the deal would pave the way for panda bonds but this would not be enough to ease pressure on the naira.

Buhari has rejected calls to devalue the currency.

“Nigerian FX policy remains the elephant in the room and China or a panda bond is not going to be enough to stop what will eventually become a tsunami of a devaluation,” he said.
($1 = 198.8000 naira)