China and Nigeria renew the currency agreement to improve bilateral trade

China and Nigeria have renewed a currency agreement that improves trade and investment between the two countries with a value of 15 billion yuan (two billion US dollars). The Chinese People’s Bank today announced in a statement that this mechanism will help improve financial cooperation and expand the use of local currencies for the two countries. He added: “The agreement is valid for a 3 -year period and can be renewed with mutual consent.” In turn, the Nigerian Central Bank did not respond to a request for comment at the time. China and Nigeria signed the agreement for the first time in April 2018 for a 3 -year period in light of the US dollar deficiency in the country in West Africa. China is the largest commercial partner for Nigeria, better than the United States of America. Nigeria imported goods and services from China at $ 11.2 billion, while its exports amounted to $ $ $ 2023. Currency exchange rate transactions aimed at providing liquidity in Al -Naira’s currency to Chinese enterprises and liquidity in the Nigerian business. Perhaps strengthening the relationship between the two countries with the aim of overcoming the dependence on the dollar, the dissatisfaction of US President Donald Trump. Last month, Trump threatened to impose large customs duties on the members of the Brics group from the global southern countries if they supported ‘any other currency to replace the strong dollar’. China is a member of the block, while Nigeria is not currently, but he wants to join it. Nigeria, the largest African country in terms of the population, had a significant shortage of the dollar until last year, when the central bank was able to trade the local currency freer against the green currency. Despite improving the liquidity in the foreign exchange market since Nigeria has terminated the policy to link his currency to a fixed price against the dollar, Naira is still under pressure as it has lost 70% of its value since the currency system has diluted. With domestic demand for the dollar in Nigeria, this mechanism can also help support the local currency.