The Central Bank of Nigeria (CBN) has created a special window making funds available for renminbi denominated letters of credit (L/Cs).

The bank revealed the new window at the same as it asked banks to submit bids for Chinese yuan under Nigeria and China's recently agreed currency swap arrangement.

Dedicated L/Cs

Nigeria's second auction of the Chinese currency will be conducted through a Special Secondary Market Intervention Sales window according to the CBN.

The bank says this window would be dedicated to the payment of renminbi denominated L/Cs for raw materials, machinery and agricultural equipment.

No limits

There will be no predetermined spread on the sale of the Chinese currency by authorised dealers to end-users the bank added.

The CBN sold 69.86 million yuan (US$10 million) in its first auction of the Chinese currency earlier this month.

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