The representatives are demanding the adoption of mechanisms to make the Chinese Yuan (CNY) an official foreign exchange reserve currency
The House of Representatives has urged for the use of the Chinese Yuan as an official exchange currency as a way to mitigate the continuous depreciation of the naira.
This House made this resolution on Wednesday, December 20, 2023, following the adoption of a motion moved by Rep. Jafaru Gambo Leko (Bauchi, APC) on the “need to Adopt Chinese yuan currency to mitigate the impact of the naira’s depreciation.”
In his lead debate, Rep. Leko observed that the harsh economic realities caused by substantial change in naira-to-dollar value hve seriously affected the living standard of citizens in the country.
He noted that with the changing global landscape, and the international trade dynamics, the Chinese Yuan has shown stability and continued international recognition which could be beneficial to the country.
He said “the global economic landscape is evolving and international trade dynamics are shifting, with China assuming a leading role in global trade. The People’s Republic of China has a stable and globally recognized currency, the Chinese Yuan (CNY), which is gaining recognition in international trade.
“Adopting the Chinese Yuan as an additional foreign exchange reserve currency might mitigate the adverse effects of naira depreciation, reduce the risks associated with exchange rate fluctuations, and enhance Nigeria’s economic stability. It would also enhance Nigeria’s trade and economic ties with China, a crucial trading partner.”
After a debate on the motion, the House directed its committee on banking regulations, banking and other ancillary institutions to ensure the full implementation of policies needed to allow for the use of the Chinese Yuan as an official exchange currency reserve, alongside other international currencies.
The committee, according to the House, is to work with the Central Bank of Nigeria (CBN) to ensure the implementation of the required policies and mechanism.
The decision of the House brings back a similar policy by the federal government which implemented a currency swap deal with China in 2018 that did not quite meet expectations.
STAR Check: Catch up on the contributions and impact of Rep. Leko in the House of Representatives here.
