• Wednesday, July 17, 2024
businessday logo


Naira trades flat as oil loan boosts dollar inflow

Naira gains at black market

The naira on Friday ended the week on a flat note at the official foreign exchange (FX) market as additional oil facilities amounting to $925 million bolstered external reserves and increased dollar inflows.

On a week-on-week basis, the naira value improved marginally by 0.13 percent as the dollar was quoted at N1,483.99 on Friday, stronger than N1,485.99 quoted last week Friday, May 31, 2024, at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data from the FMDQ Securities Exchange Limited.

Day-on-day, the naira printed flat at N1,483.99 per dollar on Friday, compared to $1,481.49 closed on Thursday at the NAFEM.

The dollar supplied by willing sellers and willing buyers increased by 26.23 percent to $269.27 million on Friday from $213.31 million recorded on Thursday. Total dollar sales within the week stood at $1.05 billion.

Read also: Naira trades flat, external reserves rise as $925m Afreximbank loan boost liquidity

Nigeria’s external reserves, which gives the Central Bank of Nigeria (CBN) the firepower to defend the naira, closed the week at $32.794 billion on Friday, rising by rising by 0.31 percent from $32.694 billion recorded last week Friday, data from the CBN showed.

The local currency depreciated by 1.00 percent on the parallel market, also known as black market. The naira closed at N1,495 per dollar on Friday, weaker than N1,480 closed on Friday last week. On a daily trading basis, the naira closed steady at N1,495 per dollar.

African Export-Import Bank (Afreximbank) on Thursday announced an additional disbursement of US$925 million under the syndicated US$3.3 billion crude oil-backed prepayment facility sponsored by the Nigerian National Petroleum Company (NNPC) Limited. This brings the total current funded facility size to US$ 3.175 billion.

Arranged and coordinated by Afreximbank, the accordion arrangement saw the raising of a combined total of US$925 million from a consortium of crude oil off-taker lenders including but not limited to the Oando Group and Sahara Energy Resource Limited.

Commenting on the disbursement, Benedict Oramah, president and chairman of the board of directors of Afreximbank, said: “The milestone achieved thus far, on this facility, demonstrates the Bank’s capabilities in performing its role as a crucial development partner for Africa. It reaffirms our commitment to assisting our member states in their efforts to achieve economic growth and stability. This funding will greatly support the attainment of Nigeria’s short and long-term economic development priorities.”

Oramah described the original facility as ‘a landmark’ for being the largest crude oil-backed facility in Nigeria and one of the largest syndicated debts raised in Africa, adding that the closure of the first accordion demonstrated the existence of positive market appetite for well-structured commodities-backed instruments.

Mele Kyari, group CEO, NNPC Limited commended Afreximbank management and team for their investment philosophy and active interest in the co-creation of prosperity. “The successful disbursement of the first accordion under project Gazelle and its interest in funding viable and strategic projects is a clear indication of investors’ confidence in NNPCL and Nigeria’s growth aspirations.” Said Kyari.

He further assured Afreximbank and all investing communities of NNPCL’s resolve to continue to grow the nation’s hydrocarbon resources and strengthen its partnerships across the oil and gas value chain locally, and globally.