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Obinna Chima

First Bank of Nigeria Limited, Stanbic IBTC, Standard Chartered Bank (SCB) and Zenith Bank Plc have been appointed the settlement banks for the $2.5 billion bilateral currency swap agreed between the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC) which was announced Thursday.

A reliable CBN source privy to the deal, said with the appointment of the four banks as the settlement banks for currency swap between China and Nigeria, they will be responsible for settling the trade transactions between importers and exporters from both countries, likely to take off just before next month.

The CBN Thursday announced that it had sealed the deal on the $2.5 billion (RMB 16 billion) currency swap with the Chinese central bank last Friday in Beijing, China.

CBN spokesman, Mr. Isaac Okorafor, said the CBN Governor, Mr. Godwin Emefiele, led CBN officials while PBoC Governor, Dr. Yi Gang, led the Chinese team at the official signing ceremony.

He said the deal was sealed on Friday after over two years of painstaking negotiations by both central banks.
According to the CBN, the transaction, which was valued at Renminbi (RMB) 16 billion, was aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, thereby reducing the difficulties encountered in the search for third currencies.

Providing more clarity on the deal, a CBN source said just as negotiations on the currency swap were being wrapped up, the central bank appointed FirstBank, Stanbic IBTC, StanChart and Zenith Bank to serve as the settlement banks for businesses and importers from both countries.

She said the reason the four financial institutions were chosen was because StanChart and Stanbic already have operational offices in China, while Zenith and FirstBank have representative offices in Beijing.

However, whereas StanChart and Stanbic can start operations immediately as settlement banks, Zenith and FirstBank will be required to upgrade their representative offices to full operations in China.

“While SCB already has a presence in China through its Standard Chartered Bank (China) Limited, Stanbic has been trading in the country through its affiliate, the Investment and Commercial Bank China (ICBC).

“However, FBN and Zenith Bank were also appointed because they already have representative offices in China.
“So, while SCB and Stanbic can start immediately, it would take FBN and Zenith Bank some time to join the settlement arrangement because they would have to convert their representative offices to operational offices.
“This whole swap agreement would kick off likely before June because we have to operationalise the settlement arrangement with the relevant institutions,” she added.

The settlement banks are expected to handle the trade obligations that would enable an importer in Nigeria, after filling the required documentation, to easily exchange the naira for the Renminbi (RMB) instead of resorting to third currencies such as the U.S. dollar, while the reverse will be the case for importers in China that trade with Nigerian businesses.

She explained further that the currency swap by the two central bank governors was partly facilitated by the improving economic environment in Nigeria.

“As you know, negotiations have been on-going for two years, so yes to some extent, the improvement in foreign reserves and government revenues, drop in the inflation rate, and the uptick in economic activities, played a role in getting the swap with the PCoB.

“But this was not the only reason factored into the negotiations, as there were other bilateral reasons which I am not at liberty to disclose,” she said.

When asked about the impact on the country’s external reserves, the source pointed out that China is Nigeria’s largest trading partner, accounting for about 35 per cent of trade.

However, the National Bureau of Statistics’ (NBS) Fourth Quarter (Q4) 2017 Foreign Trade Statistics put China’s trade with Nigeria at 22 per cent, making it a major trading partner. The total value of trade in Q4 2017 was put at N465.13 billion.

According to the CBN source, the currency swap will play a role in reserves management as pressure from Nigerian importers seeking to source dollars will now dissipate.

“Of course, this will help in terms of management of our reserves. What this means is that pressure on Nigerian importers seeking to source dollars to import goods from China will completely dissipate,” she explained.

Reinforcing the position, the statement from Okorafor Thursday said among other benefits, the agreement is expected to 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.

“It will also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries.


https://www.thisdaylive.com/index.php/2018/05/04/fbn-stanbic-stanchart-zenith-appointed-settlement-banks-for-naira-rmb-currency-swap/amp/

This is a welcome development. More needs to be done to facilitate continuous and sustainable revaluation of Naira. This is a step in the right direction.

Buhari the coward will never be brave to try this with usa just to favour china

This is good, the value of naira will climb because the demands for dollars will reduce and Nigeria will gradually cut the west out of the equation because they will be getting cheaper goods from Asia. That's like saying it opens more grounds for China to dump their goods in Nigeria, which is the only disadvantage.

Why Zenith bank ? This central bank governor sef.

yns4real:
"She said the reason the four financial institutions were chosen was because StanChart and Stanbic already have operational offices in China, while Zenith and FirstBank have representative offices in Beijing."

GTB have operation office too ,so there is no rational explanation in his action.

igub

Acjohn:
This is good, the value of naira will climb because the demands for dollars will reduce and Nigeria will gradually cut the west out of the equation because they will be getting cheaper goods from Asia. That's like saying it opens more grounds for China to dump their goods in Nigeria, which is the only disadvantage.

In one year, I'm going to call you out if this whole govt drama is a fluke.

To mi Zenith bank ND first bank re the strongest ND kan pull thru.

I'm Worried About Substandard Products From China. Our Standards Have Been Bastardised. Weak Institutions Everywhere. What's The Use Of SON In This Country?

Lol bihari and his handler's wants to spite trump nij, Direct swap me, stop killing Christians shikena

johnmartus:
Why Zenith bank ? This central bank governor sef.

Is abuse of office part of corruption or is it only stealing that is

Where are those wailers who said this deal was just on paper?

Buhari till 2023... If you don't like it go and stand in front of an incoming train...

courage89:
This is a welcome development. More needs to be done to facilitate continuous and sustainable revaluation of Naira. This is a step in the right direction.

BlackAfrican:
Where are those wailers who said this deal was just on paper?

Buhari till 2023... If you don't like it go and stand in front of an incoming train...

Chinese wise men always said 别开心太早 whenever they meet people like you too

BedLam:
In one year, I'm going to call you out if this whole govt drama is a fluke.

A fluke is a fake and a propaganda, which are the specialty of Buhari and APC.

Acjohn:
This is good, the value of naira will climb because the demands for dollars will reduce and Nigeria will gradually cut the west out of the equation because they will be getting cheaper goods from Asia. That's like saying it opens more grounds for China to dump their goods in Nigeria, which is the only disadvantage.

we are our own problem! wen the goods arrive Nigeria, Nigerians will still increase the price to gain maximum profit!.... plus China produced goods are not durable! not one!.... from clothes to bags n shoes! Koreans are far better

God bless baba buhari....kudos fr ths great achievement...wailers will desert this thread i knw.....bfr they say buhari is jst travelling up and down fr ntin..

Best move so far , It will make things easy I swear. I can buy stuff from alibaba and pay directly with naira equivalent to Yuan. Oya 2019 will be interested . baba trying by all means to gain our trust back. But road back to daura is non negotiable.

johnmartus:
GTB have operation office too ,so there is no rational explanation in his action.

ok, you can go and remove Zenith an put gtb naa

Ezi

Ok

Good move by Buhari

Acjohn:
This is good, the value of naira will climb because the demands for dollars will reduce and Nigeria will gradually cut the west out of the equation because they will be getting cheaper goods from Asia. That's like saying it opens more grounds for China to dump their goods in Nigeria, which is the only disadvantage.

There is no good in this, how does that encourage local production, we are only enriching the Chinese and creating a knowledge vacuum. We need to be creative.

Waoh.

This is the best news from this government.

The dollars exchange market will crash under it's own weight

It is a good development. Now I can buy China phone with cheaper price

Nice development

Filter what you tell your family members about your partner.

Because most times even when you have Forgiven & Forgotten, your Family may likely never forgive the partner!
















Use your position to help others and Never look down on no one because life as we know it, is very unpredictable.

Tables can turn in a spilt second. Be Humble!

johnmartus:
GTB have operation office too ,so there is no rational explanation in his action.

Zenith bank is the biggest bank in Nigeria by customer deposits.

They ought to be there on their merit. It is not their Business if the CBN governor is a former staff.

Nice one but baba ur going back to daura

The US and China are on the brink of trade war, this development would be a disaster for Nigeria and her relationship with the US, if China starts trade war with the US. This deal should have been better sealed after the US meeting with China, scheduled to take place this week, have been concluded. I'm sure we won't want anything to jeopardize our relationship with the US.

Can "ordinary " Nigerian have access to the RMB?

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