Reps wants FG to allow Chinese Yuan as official foreign exchange currency in Nigeria, give reasons

The House of Representatives has urged the federal government to adopt a 2018 policy to recognise the Chinese Yuan as an official foreign currency for conducting business transactions in Nigeria.

The move the lawmakers believe will help reduce the pressure on the naira and its depreciation.

The house reached this resolution after adopting a motion sponsored by Hon. Jafaru Leko.

The house argued that considering the volume of trade between Nigeria and China, the Chinese currency should serve as an official foreign exchange reserve alongside other major international currencies.

The committees on banking regulations, banking, and other ancillary institutions will now liaise with the Central Bank of Nigeria (CBN) to explore the appropriate mechanisms, policies, and partnerships required to implement the policy.

Speaking on his motion, Leko said the Nigerian economy has experienced substantial shifts regarding the value of the Naira, triggering economic instability and uncertainty.

According to him, the International Monetary Fund proposed diversification of foreign exchange reserves for central banks of developing countries, including Nigeria. Hon. Leko said the global economic landscape is evolving, and international trade dynamics are shifting, with China assuming a leading role in global trade.

He said the People's Republic of China has a stable and globally recognised currency, the Chinese Yuan (CNY), which is gaining recognition in international trade; He said 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.

He argued that doing so would enhance Nigeria's trade and economic ties with China, a crucial trading partner.