CBN to Increase Yuan’s Share of Foreign Reserves to 7%, Naira Weakens Further

The Central Bank of Nigeria (CBN) plans to shift some of its reserves into yuan from dollars as the Chinese currency takes a greater role in global trade, deputy central bank Governor Kingsley Moghalu said.
The bank will increase the yuan’s share of reserves to as much as 7 percent from 2 percent, Moghalu said in an interview in London, without specifying a timeframe for the change. Nigeria currently holds about 85 percent of its reserves in dollars, he said.
“It was clear to us that the future of international economics and trade will shift in large part to business with and by China,” Moghalu told Bloomberg. “Ultimately the renminbi is likely to become a global convertible currency.”
The central bank started to diversify its reserves into yuan in 2011 and is working with the People’s Bank of China to boost the holdings as soon as the relevant structures are in place, he said. Nigeria’s naira weakened 0.3 percent to 162.74 per dollar in Lagos.

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