"Clearing Backlogs": $2.2bn Afreximbank Loan Lifts Nigeria’s External Reserve, Reverses Naira's Loss
- Nigeria's foreign reserve has reacted positively to the announcement of a loan from the African Import-Export Bank
- CBN data shows that the reserve witnessed a significant increase to $33.042 billion as of January 3, 2024
- Similarly, the naira reversed its loss position to commence gain on Thursday, January 4, as a result of the development
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
Foreign exchange reserves increased to $33.042 billion as of January 3, 2024, according to data from the Central Bank of Nigeria (CBN). This is up from $32.912 billion on Friday, the final trading day of 2023.
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According to a BusinessDay report, this coincides with the reception of the African Import-Export Bank (Afreximbank) loan announcement, which has helped boost reserves.
Recall Punch reported that the federal government received a $2.25 billion foreign exchange support facility from the Afreximbank.
According to the minister of finance, Wale Edun, in an Arise TV interview, the amount represents the bank's first tranche of the $3.3bn facility to resolve the acute FX shortage that has hampered the economy.
Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said:
“This Afreximbank fund is going to help to stabilise the market further. Once the CBN can clear the backlog substantially, subsequent inflows will now be used to intervene directly in the market after the backlog has been cleared."
Naira records first gain
The naira recorded its first gain against the US dollar since 2024 on Thursday, January 4.
The naira was quoted at N895.23 to a dollar, higher than the N1,035.12 posted Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
This resulted in a 15.62% increase in the value of the naira by the close of trade.
FMDQ Data shows that the naira gained against the dollar on Friday, December 5, 2024, at the official market, marking the second gain in the New Year.
The domestic currency appreciated 3% to close at N869.13 to a dollar at the close of business, representing a N26.1 gain or a 3% increase in the local currency compared to the N895.23 closed the previous day.
Trouble for naira as external reserves drop by $1.65bn in 6 months as CBN clears FX backlogs
Legit.ng reported that Nigeria's foreign external reserves have dropped by $1.65 billion to N$32 billion since the CBN began to unify Nigeria's Forex rates.
The apex bank directed commercial banks to remove rate caps on the naira at the official Investors and Exporters (I&E) window to ensure the free float of the naira against the other international currencies.
The CBN circular said all segments are collapsed into the I&E window, stating that applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed via commercial banks.
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Source: Legit.ng
