CBN to businesses: Use Yuan instead of dollar for imports

The Central Bank of Nigeria (CBN) says local businesses importing from China should use Yuan for imports instead of using dollars.

However, payments for crude oil sold to China would be made in dollars.

Reuters reports that officials of the apex bank made this known on Wednesday at a town hall meeting with importers in Lagos.

CBN officials have been holding town hall meetings with businesses in Lagos, Aba and other cities to introduce the Yuan ahead of plans to start auctioning the Asian currency.

In May, the CBN and the Peoples’ Bank of China (PBOC) signed a Naira-Yuan swap agreement.

Under the arrangement, the CBN would hold N720 billion in an account in favour of the PBOC while the Chinese central bank would hold 15 billion yuan, implying an exchange rate of N48 to the yuan.

Businesses in Nigeria use the dollar as the main trade currency. After crude oil prices fell in 2015, the country suffered dollar shortages.

To reduce the pressure on the dollar, the CBN said it would no longer provide forex for the import of 41 items including toothpicks and makeup.

This, it said, would encourage local production and reduce dependence on imported items.

At present, the CBN provides forex for different segments of the market to ensure liquidity; this includes the directive that commercial banks should sell forex to customers over the counter.