The Central Bank of Nigeria (CBN) and the Peoples Bank of China (PBoC) have signed a three-year bilateral currency swaps agreement worth 844 billion naira or 15 billion yuan ($2.36 billion).

The Chinese apex bank said on its website the swap deal will facilitate trade and investment, and safeguard stability of financial markets of both countries.

Isaac Okorafor, the CBN spokesman in a statement, said the agreement will reduce the challenges encountered in the search for third currencies by industrialists and other business persons from both countries.

“Among other benefits, this agreement will provide naira liquidity to Chinese businesses and provide RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience and volume of transactions between the two countries,” Okorafor said.

“It will also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries.

“The deal, which is purely an exchange of currencies, will also make it easier for Chinese manufacturers seeking to buy raw materials from Nigeria to obtain enough naira from banks in China to pay for their imports from Nigeria. Indeed, the deal will protect Nigerian business people from the harsh effects of third currency fluctuations.”

The currency swap deal was one of the issues discussed when President Muhammadu Buhari paid a working visit to China in April 2016.