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8 Jun 2018

CBN Provides Guidelines For Nigeria, China Currency Swap

The Central Bank of Nigeria, CBN, yesterday, released guidelines for the Nigeria and China currency swap deal.
247NNU recently reported that Nigeria and China reached an agreement on Naira-Renminbi Currency Swap.

The agreement between the CBN and the People’s Bank of China (PBoC) is worth about $2.5billion. In local currencies, the swap is worth 15billion Renminbi (RMB) or N720billion.

The guideline was contained in a document signed and made available by the Director, Financial Markets Department of CBN, Dr Alvan Ikoku. In the document titled, “Regulations for Transactions with Authorised Dealers in Renminbi,” CBN said it is considering conducting bi-weekly trading sessions to ensure liquidity for trade and direct investment between the two countries.

The Apex bank in the guidelines mandated commercial banks and merchant banks, authorised dealers to open Renminbi bank accounts and provide details to the CBN. 

The CBN said, “All Authorised Dealers shall open Renminbi accounts with a corresponding bank and advise CBN with its Renminbi Account details which may either be with a bank onshore or offshore China.

“Importers intending to import from China shall obtain Proforma invoice denominated in Renminbi as part of the documents required for the registration of Form M. “FX purchase in the window shall not be used for payments on transactions in which the beneficiaries are not in China. “Authorised Dealers shall not open domiciliary accounts denominated in Renminbi for customers.” 

The CBN, however, said the deal would not stop levies on imports and exports, while unused funds by authorised dealers more than 72 hours would be returned to the apex bank for repurchase at the bank’s buying rate. It added that authorised dealers might not earn more than 50 kobo in a customer’s bid.

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