The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, has urged the Federal Government to capitalise on the emerging global trends to strengthen the Naira-Chinese Yuan swap deal with a view to boosting derivatives market.
Speaking with financial journalists in Lagos yesterday, Gwadabe stated that the ongoing economic, trade and currency wrangling between the United States and Russia/Asian countries present Nigeria with some lifetime opportunities that need to be explored.
He said the fear of the dollar losing its global dominance is real as Russia and Asian countries unite against the United States.
Advising Nigeria and other emerging markets not to be caught unaware, the ABCON boss said that Russia and Asian countries are already becoming less reliance on the greenback and its hegemony,
He explained that the insistence by Russia and China that the global economic system must change in such a way as to stop the United States from being able to exert economic pressure on other countries is an indication of how both countries can pursue the agenda, which has certain implications for Nigeria economy , its currency and financial system.
He recalled that at the recently concluded G20 meeting in Tokyo, Britain, France and Germany announced that the special trade mechanism that they have been working on this year is now up and running. It is called the Instrument in Support of Trade Exchanges (Instex) and it will permit companies in Europe to do business with countries like Iran, avoiding American sanctions by trading outside the SWIFT system, which is dollar denominated and de facto controlled by the US Treasury.
Gwadabe said the significance of the European move cannot be understated as was meant to weaken dollar dominance as the world’s trading and reserve currency. Besides, talks have been on for years on establishing trade mechanisms that would not be dollar based, but they did not gain any momentum until the Trump Administration abruptly withdrew from the Joint Comprehensive Plan of Action (JCPOA) with Iran over a year ago.
For instance, the US had imposed sanctions on Russia over allegations of interference in the Ukrainian conflict and in the US presidential election in 2016, both of which Moscow has denied. Washington also initiated a trade war with China, and has been attempting to force Chinese tech-giant, Huawei out of the global market.