If you are an importer, importing goods from China, the Central of Bank of Nigeria, CBN wants you to use the Chinese yuan instead of US dollars.

The CBN believes the adoption of yuan for Chinese imports will reduce pressure on the naira and help boost Nigeria’s foreign reserves.

On Wednesday, officials of the CBN held a town hall meeting with businesses owners in Lagos to introduce the yuan for imports from China ahead of plans to start auctioning the Asian currency in July.

The dollar has been Nigeria’s main trade currency but after it suffered severe shortages due to decline in crude oil prices in 2015, it began to explore alternatives.

“The central bank will encourage users importing goods from China to use the yuan and not the dollar,” officials said.

“Dollar demand burden arising from trades with China would be lifted from our FX reserves,” they said, adding that initial yuan trades could be small.

Also Read: 5 Creative Ways To Fund Your Business From Day 1

Recall that Nigeria signed a $2.5 billion currency swap arrangement with the People’s Bank of China (PBOC) in May.

Under the swap arrangement, Nigeria’s central bank would hold 720 billion naira in an account in favour of the PBOC while the Chinese central bank would hold 15 billion yuan, implying an exchange rate of 48 naira to the yuan.

The bank also said the move is aimed at encouraging Chinese firms buying local raw materials and semi-finished goods to pay in naira.

However, payment for crude oil sold to China would be in U.S. dollar, they said.

It is also hoped that this arrangement will help reduce trade deficit between Nigerian and China.

At the moment, Nigeria currently runs a large trade deficit with China, its biggest trading partner.

For instance, in 2017, Nigeria imported goods worth almost $2 billion per annum from China as against almost $500 million imported by the Chinese.

Don't forget to share this article with your friends

Also Watch: Why African Teams Crashed Out Of 2018 World Cup | Over The Bottles