The Nigerian Naira witnessed a notable surge against the US Dollar on both the parallel market and the official Investors and Exporters (I&E) window on Thursday, August 17th, 2023 exchanging at N830 against the US dollar in the black (parallel) market.
This upswing was accompanied by a substantial injection of supply into the forex market due to NNPC Limited securing a $3 billion facility from AfreximBank meant to stabilize the exchange rate.
Naira experiences impressive gains, exchanges at N930 per dollar
According to an investigation by VERY SERIAL, the Naira exhibited impressive gains, appreciating by at least N100 equivalent to 10.7 per cent in the black market otehrwise called parallel market, leading to a decrease in the exchange rate to N830 per dollar from the previous N930 per dollar.
Similarly, in the official I&E window, the Naira saw an appreciation of N21.44 per dollar or 3.25 percent, resulting in an indicative exchange rate of N759.86 per dollar, down from N781.30 per dollar previously.
Industry sources in the parallel market attributed this Naira appreciation to recent statements by the Acting Governor of the Central Bank of Nigeria (CBN), Mr. Folashodun Shonubi.
His comments signaled forthcoming measures from the central bank to boost forex supply and counter speculators, aiming to address the ongoing depreciation of the Naira.
In line with this trend and in support of the federal government’s fiscal and monetary reforms, NNPC Limited announced a Commitment Letter and Term Sheet agreement with AfreximBank for a $3 billion crude oil repayment loan.
The loan is intended to provide immediate disbursements that will aid NNPC Ltd. in supporting the government’s efforts to stabilize the exchange rate market.
It’s important to note that the loan is structured as an upfront cash loan against a portion of future crude oil production, rather than a crude-for-refined products swap.
This strategic approach aims to strike a balance between addressing immediate economic needs and ensuring future production capabilities.
