NIgeria is set to earn its oil exports in Chinese Yuan, Business Day reports. Through a new agreement between Nigeria and China, between 5-10% of Nigeria’s foreign export earnings will be domiciled in the Chinese currency.
According to Central Bank Governor, Mr. Sanusi Lamido Sanusi, Nigeria is seriously considering the Yuan officially saying that “the Chinese Yuan is afterall, already being exchanged in the country.”
Bismark Rewane, C.E.O of Financial Derivatives Company (FDC Limited) said that the CBN’s decision to diversify the country’s external reserves from the U.S. dollar will benefit portfolio managers and will act as a store of value.
However, despite the positive benefits, some analysts fear that if Nigeria’s decision to earn some of its oil exports in Yuan is emulated by other African countries, it could pose a strain on Nigeria’s relationship with the United States.
Currently, the U.S. accounts for about 36% of Nigeria’s oil exports.
What do you think about Nigeria’s recent decision to earn some of its oil export earnings in Chinese Yuan?