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Forex traders link recent naira stability to China-Nigeria swap agreement.
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Peer-to-peer currency trades also helping ease dollar demand.
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Importers from China increasingly settling deals directly in yuan.
Nigeria’s foreign exchange market is witnessing a shift as Chinese traders now accept naira for yuan settlements, reducing pressure on dollar demand. This trend, according to currency dealers, is tied to the Nigeria-China currency swap arrangement alongside the growing popularity of peer-to-peer (P2P) transactions.
The Association of Bureau De Change Operators of Nigeria (ABCON) explained that “the Chinese are now collecting naira for yuan, doing P2P,” noting that this practice is boosting liquidity in the forex market despite the earlier expiration of the swap agreement.
Nigeria and China first signed the $2.5 billion currency swap deal in 2018, later renewed in December 2024, allowing both nations to settle trade in local currencies without using the dollar as an intermediary. Imports from China, valued at N14.14 trillion in 2024, make it Nigeria’s largest trading partner, further amplifying the agreement’s significance.
However, while the swap has reduced dollar pressure, some traders argue its impact on everyday market operations remains limited. They point out that many Nigerian businesses and Chinese suppliers still prefer transactions in US dollars given its global acceptance and liquidity.
READ ALSO: Naira Falls Against Dollar as Traders Blame Diversion, Government Payouts
Even so, the deal offers a strategic advantage for businesses directly engaged in China-Nigeria trade, cutting out third-currency conversions and lowering transaction costs.
Analysts warn, though, that without deeper yuan liquidity on Nigerian streets and expanded access beyond trade imports, the effect on the wider black-market exchange rate will remain modes
