Nigeria has included the Chinese yuan on the list of currencies it allows for trade settlement in the foreign exchange market.

This will enable Nigerian banks to denominate letters of credit (L/Cs) in the Chinese currency.

Directive

The Central Bank of Nigeria (CBN) recently issued a directive that included the yuan amongst 13 other currencies traded on the country's domestic foreign exchange market.

Nigeria's banks can only denominate L/Cs in a currency specified in CBN's list of exchangeable currencies.

Growing recognition

According to a Nigerian banker, the volume of trades in yuan is still small, but it is expected to grow substantially in the future.

Nigeria is one of a growing number of countries, including Russia, Turkey and South Africa, now allowing the yuan to be traded and used for trade settlement.

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