The trade wars between the United States of America (US) and China contributed to higher crude oil (Brent) prices, which is good for the naira and Nigerian economy, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe has said.
Speaking to financial journalists in Lagos, Gwadabe said that since the beginning of April this year, oil prices have remained above $70/ per barrel as the trade war rages. He said the US sanctions on Iran and Venezuela have tightened the supply of crude oil to the market and put upward pressure on oil prices.
Gwadabe disclosed that Washington had last week, raised tariffs on $200 billion worth of Chinese imports to 25 per cent from previous rate of 10 per cent, pushing prices of affected consumer goods higher.
“The rising oil prices as a result of tension in the Persian Gulf and the increasing trade wars between two world economic giants, China and America will help to take the naira to another next level of stability. I advise the Federal Government and the Central Bank of Nigeria (CBN) Management to take advantage of the two crises- trade tensions and rise in crude oil prices by introducing that will support growth and development opportunities,” he said.
He however said that with the exchange rate stability being witnessed in the market, the next target of the apex bank should be to have a single digit interest rate that would stimulate economic activities and business growth.
He said that Russia and the Asian countries are already utilizing their Yuan Swap agreement with China to strengthen their local currency, a strategy Nigeria is also expected to pursue.