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You are here:Home>>Strategic Research & Analysis>>Nigeria Adds Chinese Currency to Foreign Reserve
Monday, 05 September 2011 22:52

Nigeria Adds Chinese Currency to Foreign Reserve

Written by Bloomberg
Chinese Yuan Chinese Yuan ATF

 

Nigeria Central Bank Buys Chinese Yuan to Add to Reserves, Sanusi Says

Nigeria's central bank is diversifying its foreign-currency reserves and plans to hold between 5 percent and 10 percent in Chinese yuan, said Governor Lamido Sanusi.

Dollars and euros will remain an important part of the country's $33 billion holdings, he said today in an interview broadcast on CNBC.

A downgrade of the U.S.'s credit rating by Standard & Poor's last month and financial turmoil in Europe "added urgency to start moving away at least some of the reserve from these currencies and start looking to the future," Sanusi said. While the U.S. will remain a very important economy, more countries will look to China, "which is better managed, and which seem to have much stronger fundamentals," Sanusi said.

PhotoCBN's Sanusi

Nigeria, Africa's top oil producer and most populous nation with about 140 million people, depends on oil exports for more than 80 percent of government revenue and 95 percent of foreign-exchange income.

Nigeria is planning a swap arrangement with the People's Bank of China for supplies of yuan, Sanusi said. The Asian nation's decision to allow its companies to make outgoing investments in yuan will also become a source of supplies of the currency, he said.

 

"Given the size of the trade between Nigeria and China, given the fact that we expect that to grow, settlement in yuan will be one good way to use the liquidity," Sanusi said.

Total imports from China in the first quarter rose 60 percent to 341.8 billion naira ($2.2 billion) compared with 207.8 billion naira from a year earlier, according to the National Bureau of Statistics. Exports during the period rose 67 percent to 63 billion naira.

 

Last modified on Monday, 05 September 2011 22:59

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