The House of Representatives has asked the federal government to implement the policy adopted in 2018 that recognises the Chinese Yuan as an official foreign currency for conducting business transactions in Nigeria to curb the continuous depreciation of the naira.
The House asked its committees on Banking Regulations, Banking, and Other Ancillary Institutions to liaise with the Central Bank of Nigeria (CBN) to explore the appropriate mechanisms, policies, and partnerships required for giving effect to the policy.
Adopting a motion sponsored by Hon. Jafaru Gambo Leko, the House said considering the volume of trade between Nigeria and China, the Chinese currency should serve as an official foreign exchange reserve currency alongside other major international currencies.
Hon. 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 recognized 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.
House Leader, Hon. Julius Ihonvbare informed the House that the use of the Yuan was adopted as a policy by the government after the collapse of the price of crude oil in the international market, pointing out that what should be done is to implement the policy.
