Forex traders in Nigeria have revealed that Chinese traders are increasingly accepting the naira in place of dollars for transactions, particularly for yuan exchanges, contributing to the recent stability in the naira's exchange rate.
This shift is attributed to the renewed currency swap agreement between Nigeria and China, which facilitates direct trade in local currencies and reduces reliance on the US dollar.
According to a report by Nairametrics on September 2, 2025, the Association of Bureau De Change Operators of Nigeria (ABCON) President Aminu Gwadebe highlighted this development as a key factor in easing pressure on the naira.
"The Chinese are now collecting naira for yuan, doing P2P," Gwadebe stated, noting the role of peer-to-peer (P2P) foreign exchange platforms in enabling these transactions without intermediaries like banks.
The currency swap deal, first signed in April 2018 and renewed in December 2024 for $2 billion (equivalent to 15 billion yuan), aims to enhance bilateral trade and investment by providing naira liquidity to Chinese businesses and yuan access to Nigerian importers.
This has been particularly beneficial for Nigeria's import sector, where goods from China dominate.
Traders mentioned a "Nigerian market" in China where naira is collected and used to facilitate dollar and yuan sales, further integrating the currencies.
However, some experts caution that the impact is limited in everyday scenarios.
Currency trader Yusuf noted that while the swap reduces dollar dependence for China-Nigeria trade, the US dollar remains preferred globally for its liquidity.
"Even Chinese suppliers often ask for dollars, not naira or yuan. The swap is helpful, but on the ground, its impact on the black market is very small," he said.
P2P trades, though growing, primarily affect larger business dealings rather than personal remittances or small-scale imports.
The naira has shown relative stability recently, trading around ₦1,531 to the dollar as of September 1, 2025, compared to earlier volatility.
This comes amid broader economic reforms under President Bola Tinubu's administration, including forex market liberalization.
Economists suggest that continued promotion of such swaps could further bolster the naira, but challenges like dollar shortages and inflation persist.
As Nigeria strengthens ties with China—its largest trading partner—the acceptance of naira signals potential for deeper economic integration, though full de-dollarization in trade remains a long-term goal.
Click to signup for FREE news updates, latest information and hottest gists everyday
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com