In response to growing concerns over the rapid depreciation of the Naira, Nigeria is considering a strategic move to adopt the Chinese Yuan as a reserve currency. The proposal, presented by Jafaru Leko, a representative from Bauchi State, gained traction during a plenary session on Wednesday.
Expressing apprehension about the adverse effects of Naira depreciation on the economy, Jafaru Leko highlighted the need for proactive measures. He cited the International Monetary Fund’s suggestion to diversify foreign exchange reserve currencies, with Nigeria being earmarked for this initiative.
Leko acknowledged the prominence of China in global trade and the evolving dynamics of the international economy. Embracing the Chinese Yuan as an additional foreign exchange reserve, he argued, could mitigate the risks associated with Naira depreciation, reduce exchange rate fluctuations, and bolster Nigeria’s economic stability.
The House responded affirmatively to this proposal, directing its committees on banking regulations, banking, and other ancillary institutions to engage with the Central Bank of Nigeria. Their mandate includes investigating necessary partnerships, policies, and mechanisms for the adoption of the Chinese Yuan as a reserve currency. The committees are expected to report back with recommendations for further legislative action within four weeks. This potential move aligns with Nigeria’s efforts to strengthen economic ties with China, a significant trading partner.
