The Central Bank of Nigeria (CBN) on Wednesday said that the currency swap agreement with the People’s Bank of China (PBoC), was not intended to serve the needs of substandard or adulterated goods importers in the country.
The Governor of the apex bank, Mr. Godwin Emefiele, made this clarification at the Currency Swap Forum for North Central Zone held in Abuja for the purposes of sensitizing all stakeholders in the trade sector on the conditions and benefits of trading under the new Reminbi denominated window.
Emefiele, who was represented at the forum by the bank’s Acting Director, Corporate Communications, Mr. Isaac Okorafor, said the swap deal had the potential of reducing importation of substandard goods, saying that only goods approved by regulatory bodies would qualify under the agreement.
The Governor clarified: “If there is anybody that thinks he or she will collect Renminbi through this window and sell on the street, the person is sadly mistaken.
“Transactions under the deal will be done electronically and this deal is only for products that originate from China. It does not apply to any transaction in Asia, outside the Chinese territory”, Emefiele stressed.
Commenting on the currency deal, the bank’s Assistant Director, Financial Market Department, Mr. Oreva Eweh, explained that speed and efficiency remained some of the benefits of trading under the Renminbi-denominated window for all merchandise trade with Chinese manufacturers.
Similarly, another official of the bank’s Trade and Export Department, Mr. Richard Maikai, explained the documentation requirements under the agreement.
He said: “Importers intending to import from China must obtain pro forma invoice denominated in Renminbi as part of the documents required for registration of Form M.
“Also, the foreign exchange window cannot be used for payments on transactions in which the beneficiaries are not in China. In addition, authorised dealers shall not open domiciliary accounts denominated in Renminbi for customers”, Maikai added.
He explained further that Bureau de Change Operators were not eligible to take part in the transaction as cash transactions would not be allowed under the window.
Earlier, the Director-General, Abuja Chamber of Commerce and Industry, Mines and Agriculture (ABUCCIMA), Mr. Adetokunbo Kayode, said the currency swap deal would make doing business easier for merchandise traders and other export-oriented business owners in the country.
He also appealed to government to implement favourable business policies with a view to fast tracking the nation’s economic growth on a sustainable basis.
It will be recalled that the CBN and PBoC signed a three-year renewable bilateral currency swap deal worth about N720 billion or 15 billion Renminbi.
The deal was meant to facilitate trade between Nigeria and China and ensure stability in the foreign exchange market, among others.
