Africa's top oil exporter will convert as much as 10 percent of its foreign cash reserves to the Chinese yuan as China's importance as a trade partner grows.
Nigerian Central Bank Governor Lamido Sanusi said in Beijing today that Africa's top oil exporter will convert as much as 10 percent of its $33 billion in foreign reserves from US dollars into Chinese yuan. Central banks use foreign reserves to manage their own currency's value.
In Nigeria's case, the up to $3.3 billion it may convert to yuan isn't an enormous sum – not, at least, for the oil-rich exporter. What is enormous, economists say, is what the bank's decision says: The yuan, pegged to the dollar until not long ago and managed more recently to keep Chinese exports cheap -- is turning into a global reserve currency. Africa – particularly West Africa – may be China's earliest, easiest zone of success.