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Nigeria Reserves: CBN Plans to Get Yuan to 10%

By on September 8, 2011

CBN plans to reach a target of holding 10 percent of Nigeria reserves in yuan “as soon as possible,” said central bank Governor Lamido Sanusi.

The nation plans to start holding the Chinese currency next quarter, predicting it will appreciate given the strength of China’s economy, Sanusi said today in an interview in Hong Kong, adding that the target was set more than a year ago. He said the yuan will “inevitably” become a reserve currency and that increased convertibility outside China had boosted its appeal.

The $32 billion in Nigerian reserves are now 79 percent held in U.S. dollars, with the rest largely in euros, Swiss francs and British pounds. Asia’s central banks are also diversifying their growing reserves into yuan debt. Philippine Finance Secretary Cesar Purisima said on Sept. 3 that buying yuan may be “prudent.”

“Confidence in China doesn’t mean lack of confidence in America,” Sanusi said. “Europe and America will continue to be important parts of the world. Having said that, it will be almost living in a dream world to ignore China. It’s the second- largest economy in the world and it’s well-managed.”

Bloomberg