House Moves To Curb Depreciation Of Naira

By Oduyemi Odumade

The House of Representatives has called on 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 also mandated 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 to effect the policy.

Adopting a motion sponsored by 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.

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.

Leko noted that 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.

The Lawmaker 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.

Edited By Grace Namiji