The Central Bank of Nigeria has directed banks to submit bids for the Chinese yuan, in its second auction of the currency after it agreed a swap with the People’s Bank of China (PBoC) in May 2018.
According to the CBN, the auction is part of efforts to encourage the use of an alternative trading currency to the U.S. dollar especially as Nigeria imports heavily from China.
The CBN in a recent circular stated that for an authorised bank to access the bi-weekly auction of the Chinese currency, such dealers “shall open Renminbi accounts with a correspondent bank and advise it (CBN) with its Renminbi account details which may either be with a bank onshore or offshore China,” it stated.
In May 2018, the CBN signed a $2.5 billion three-year currency swap deal with Beijing to facilitate trade between the two countries and cut reliance on the dollar.