Central Bank of Nigeria (CBN) has injected 17.9 million Chinese yuan (US$2.5 million) into the currency market to support letter of credit (L/C) business with China and reinforce the bank's efforts to keep the naira stable and prevent currency shortages.

For the same reasons the bank has also injected US$323.5 million to fund certain essential commercial imports.

Targeted support

A central bank spokesman said the intervention in the Chinese currency was for yuan-denominated L/Cs.

US dollar support from CBN is earmarked for agricultural machinery and industrial raw materials.

The spokesman added that the bank would continue to ensure adequate liquidity in the market.

Earlier support

In August 2018, CBN created a special window making funds available for yuan-denominated L/Cs (DC World News, 24 August 2018).

The window was dedicated to the payment of L/Cs for raw materials, machinery and agricultural equipment.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.