Contrary to reports that the currency swap agreement with China has expired, the Central Bank of Nigeria on Monday, disclosed that its bilateral currency agreement with China was renewed after the expiration of the deal in 2021.
The apex bank released details of the 2018 currency swap agreement with Peoples Bank of China (PBoC) in a Freedom of Information (FOI) request sent by Femi Falana, a human rights lawyer.
According to the apex bank, in May 2018, CBN and PBoC signed a currency swap deal valued at renminbi (RMB) 16 billion (about $2.5 billion).
The swap deal was signed by Godwin Emefiele, the suspended CBN governor, and Yi Gang, the former PBoC governor.
The deal was designed to provide the Chinese and Nigerian currencies directly to industrialists and other businesses from both countries.
“This agreement will provide naira liquidity to Chinese businesses and provide RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience, and volume of transactions between the two countries,” CBN had said after the signing of the deal.
In June 2023, Falana sent an FOI request to the CBN to disclose the details of the currency swap agreement.
In a response to Falana’s request, the apex bank said the swap deal, which commenced in July 2018, is renewable every three years, adding that the agreement was renewed after it expired in April 2021.
The CBN further disclosed that the sum of 15 billion Chinese yuan (Renminbi) (CNY) was the “amount usable within the year”.
The financial regulator said since the renewal of the deal, nine billion yuan has been “drawn”, six billion yuan utilised, while the sum of three billion yuan is outstanding.
According to the bank, out of the six billion yuan utilised, the sum of 5.10 billion yuan had been repaid, while 2.10 billion yuan had not been utilised.
The swap commenced in July 2018, expired in April 2021, and was subsequently renewed. The sum of CNY 15.00 billion was the overdraft amount usable within the year,” the apex bank disclosed this in a response dated August 8, 2023.
“Since its renewal, CNY9.00 billion had been drawn, CNY6.00 billion utilised and CNY3.00 billion outstanding, and out of the CNY6.00 billion utilised, the sum of CNY5.10 billion had been repaid, while the sum of CNY2.10 billion had not been utilised, leaving the sum of CNY900.00 million yet to be repaid. Furthermore, the next renewal is expected to take place in 2024.”
Credit: Daily Sun