How to access currency swap deal with China as an importer

Currency swap, the Nigerian government on 3^rd May 2018 announced its commitment to get into currency swap deal with the Chinese government.

Under this bilateral currency swap agreement, the People’s bank of China received about 16 billion Chinese Renminbi (RMB), while the Central bank of Nigeria (CBN) is to have $2.5 billion.

OBJECTIVES/BENEFITS OF CURRENCY SWAP DEAL

The fund is made to provide adequate local currency liquidity to Nigerian and Chinese industrialists to carry out their businesses with ease, so as to erect dollar sourcing issues which have impeded the activities of these economic stimulators.

The primary aim is to boost local liquidity in the Nigerian economy.

As usual, the Nigeria China currency deal can be accessed through the commercial banks.

HOW TO ACCESS THE CURRENCY SWAP DEAL BETWEEN NIGERIA AND CHINA

Kindly approach any of the authorized banks and commence with the following:

• You will have to write officially to the bank, declaring your interest to access the CBN currency swap agreement between Nigeria and China.
• You will need to provide Form M: Form M is a statutory document to be completed by all importers who wish to import goods and services into Nigeria.

This is initiated electronically on the single window trade portal provided by the Central Bank of Nigeria in conjunction with the Nigeria Custom service.

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REQUIRMENTS FOR FORM M IN IMPLEMENTATION OF CURRENCY SWAP AGREEMENT

• Proforma Invoice
• Insurance certificate. Other documents will depend the regulatory body responsible the item being imported.

A Proforma invoice: is a bill of sales document sent to a buyer in advance of a delivery of goods or shipment. This contains the quantity, sizes and unit of goods being shipped.

This invoice will usually define or describe the items purchased and relative important information as weight and charges accrued.

Insurance Certificate: Is a document which usually provides firsthand information on specific and extent of insurance coverage of the goods being shipped.

That being said other things to made provision for whilt accessing the currency swap agreement between Nigeria and China are Well funded account with the bank to the tune of the amount in question, however Bill of exchange (BC) could as well be used in place of Form M.

AT WHAT RATE IS THE CURRENCY SWAP DEAL BEING OFFERED

The Central Bank of Nigeria has stated that involvement into this deal is to enhance and make liquidity available for merchants will find the currency swap deal useful.

However, importers will access it at the rate of N47 per Chinese RMB.

CHARGES INVOLVED IN IMPLEMENTATION OF THE CURRENCY SWAP AGREEMENT

For the bank to process, you’ll incure 1% charge for letter of Credit (LC) which is why you required Form M and 0.5% for Bills for Collection (BC).

As good as Currency swap agreement sounds, it’s not available for the importation of every category of goods.

GOODS THAT CAN BE IMPORTED USING CURRENCY SWAP AGREEMENT

The following items can access the deal

• Importation of raw materials by manufacturers
• Simple machinery and business
• Spare parts. These are the only goods entitled to this agreement. visit https://www.skyebankng.com for your application

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Conclusion

CBN Currency swap with China has been a good development which should in turn favor local manufactures who will source raw materials from China as well the importation of machines to further advance production locally, which is the only way we can grow the local industries and better the Nigerian economy.