In order to prevent further depreciation of the naira, the House of Representatives in Nigeria on Wednesday advocated for the official acceptance of the Chinese Yuan as a foreign exchange reserve currency among other internationally recognised currencies.
Following the adoption of a motion made by Hon. Jafaru Leko, the House passed a resolution.
Leko, the motion’s sponsor, stated that significant fluctuations in the value of the naira are causing economic instability and uncertainty in Nigeria.
The legislator added that the central banks of developing nations, such as Nigeria, should diversify their foreign exchange holdings, as suggested by the International Monetary Fund (IMF).
“International trade dynamics are shifting and the global economic landscape is evolving, with China assuming a leading role in international trade,” the speaker stated.
He added that the Chinese Yuan, the currency of the People’s Republic of China, is becoming more and more well-known throughout the world.
He 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.
“Furthermore, it would enhance Nigeria’s trade and economic ties with China, a crucial trading partner.”
