Nigeria’s House of Representatives has passed a motion urging the Federal Government and the Central Bank of Nigeria to expedite the adoption of the Chinese Yuan as an alternative trading currency.
This motion was passed in response to the bilateral currency swap agreement between Nigeria and China that the Federal Government announced.
Adopting the Yuan as a second foreign exchange reserve currency, according to M10News, could improve Nigeria’s economic stability, lessen the adverse effects of the Naira’s depreciation, and lower the risks related to exchange rate fluctuations.
Jafaru Leko, who moved the motion, argued that China had already assumed a leading role in the global economy and that adopting the Yuan would be prudent for Nigeria.
Following the adoption of the motion, the House resolved that the committees on banking regulations, banking, and other ancillary institutions would liaise with the Central Bank of Nigeria to explore the appropriate mechanisms to speed up the 2018 agreement on Yuan.
Adopting the Yuan could provide Nigeria with a viable alternative to traditional Western currencies, which have been a source of instability for the Naira. The House’s resolution reflects a growing recognition of the need for Nigeria to diversify its foreign exchange reserves and reduce its dependence on a single currency.
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