The Chinese yuan swap deal can be reactivated to fight Nigeria’s high inflation, according to a media report, citing experts.

The currency swap deal, worth $2.4 billion, was previously arranged to reduce the need to use US dollar in bilateral trade. It was a three-year agreement that concluded on April 27, 2018.

According to TheGuardian newspaper, experts have suggested that a similar deal could be arranged with countries that have huge trade volumes with Nigeria. This will ease the pressure on the dollar and keep inflation in check.

A currency swap deal will be particularly favorable to Nigeria’s foreign reserves that have been on a steady decline, which was partly due to the unmitigated oil theft in the Niger Delta region.

However, experts pointed out that concerns remain as to the efficacy of the currency swap to fully address the challenge of high dollar demand, given Nigeria’s imports from several countries.

According to the the National Bureau of Statistics, inflation rose for the fifth straight month, hitting 18.6% in June 2022, compared with 17.7% in May 2022.

(Editing by Cleofe Maceda;