Nigeria’s NNPC secures $3 billion loan to stabilize FX market

Nigeria’s state-oil firm NNPC said on Wednesday it has secured a $3 billion crude oil repayment loan from Cairo-based Afrexim Bank that will support the government’s reforms to stabilize the exchange rate market.

Nigeria, Africa’s largest economy, is trying to increase its reserves and prevent the devaluation of its currency. The Nigerian currency has fallen to a record low on the black market two months after trade restrictions were eased on the official market.

The central bank will take steps to affect the foreign exchange markets in the coming days, the acting governor of the central bank, Folashodun Shonubi, said on Monday after meeting Governor Bola Tinubu to explore ways of increasing dollar liquidity on the official market.

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Mr Shannubi said the president was concerned about the black market rate used as a benchmark for domestic consumption and its impact on inflation, but did not specify what measures would be taken.

In the boldest reform in decades, Mr Tinub scrapped costly fuel subsidies and devalued the naira, attracting foreign investors to the country, which is facing high inflation and spiralling debt servicing costs.