The parallel foreign exchange (FX) market responded favorably to the $3 billion crude oil repayment loan secured by the Nigerian National Petroleum Company Limited (NNPCL) from Africa Import and Export Bank (AFREXIM) to stabilize the local currency, which has given the naira some momentum against the dollar.
Checks on the FMDQ website, confirmed that the naira closed at N773 to the dollar at the NAFEX window on Wednesday, August 16. On Thursday, it gained further, reaching a closing rate of N740 per dollar.
Prior to the announcement of the AFREXIM loan agreement on Wednesday, dealers in foreign exchange on the parallel market were buying the greenback at N880 and selling it at N910.
Otega Ogra, senior special assistant to President Bola Tinubu on Digital/New Media explained in a tweet what the $3billion Emergency Crude Repayment Loan from Afrexim “Will assist NNPC Limited in settling taxes and royalties in advance. It will also equip the Federal Government with the necessary dollar liquidity to stabilise the Naira, with limited risk,” he said.
He added that it will “Strengthened Naira as a result of this initiative will lead to a reduction in fuel costs. This means that if the Naira appreciates in value, the cost of fuel will drop and further increases will be halted,” Ogra added.
Ada Peter
