The day may be near when Nigeria is done with dollars. Africa’s largest oil-producing nation announced recently that it is selling off 10 percent of the U.S. Dollars it keeps in reserve currency and replacing it with Chinese Yuan.
The majority of Nigeria’s $32 billion reserves are currently in U.S. dollars, with the remaining currency composed of euros, Swiss francs and British pounds. Reserves are used by a country’s central bank to regulate their own currency’s value.
Although the move comes amid a declining dollar and a downgrade of the U.S. credit rating, the Nigerian bank chief made sure to express that the move wasn’t a slight to U.S. currency.
“Confidence in China doesn’t mean lack of confidence in America,” said Nigeria’s central bank governor Lamido Sanusi, according to Bloomberg. “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.”
In recent years, China has become a major player in African investment. The nation has been busy making inroads around the continent, trading much needed infrastructural development projects for minerals and raw materials. And as China’s economy grows stronger and expands its influence across the continent, there is speculation that more African governments will follow in Nigeria’s footsteps.
(Photo: Mark Wilson/Getty Images)