Naira appreciation continues, sells for 860/$ at parallel market

By Sodiq Adelakun

Nigerian Naira has continue to appreciate against the US Dollar as the parallel segment of the foreign exchange (FX) market reacts to the $3 billion crude oil repayment loan secured by the Nigerian National Petroleum Company Limited (NNPCL) from the Africa Import and Export Bank (AFREXIM).

This move is aimed at stabilising the local currency.

It was observed on Thursday, August 17, that the parallel market FX dealers were  buying the US Dollar at N835 while selling it at N860.

This marks a significant improvement from the rates prior to the announcement of the AFREXIM loan deal, where dealers were buying the US Dollar at N880 and selling it at N910.

Otega Ogra, the senior special assistant to President Bola Tinubu on Digital and New Media, explained in a tweet what the $3 billion Emergency Crude Repayment Loan from Afrexim is meant to achieve.

“What’s the benefit of this loan to Nigeria? The loan 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.

“Will this affect fuel prices? A 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.

“What about subsidies? Are they coming back? No. A stronger Naira will result in lower prices than at the current level, making subsidies unnecessary.

“The deregulation policy remains unchanged,” the President’s aide said.