Key questions this article answers
- The naira fell to a record low of ₦955/$ at the black market; why?
- How will the naira perform with the new NNPCL stabilisation fund?
On Wednesday, NNPC Limited announced that it secured a $3 billion crude oil repayment loan from AFREXIM Bank to support the CBN’s effort in defending the naira post the forex reforms.
The NNPCL will repay the $3 billion loan with crude oil, and this cash-for-crude deal comes at a crucial time when the CBN struggles to stabilise the naira.
On August 10, the naira fell to a record low of ₦955/$ at the black market due to high forex (FX) demand and lingering FX supply shortages. By August 17, the naira appreciated by 10% to ₦860/$.
After adopting exchange rate reforms, the currency’s value is expected to depreciate as initial market reactions to ascertain the fair value of the currency lead to volatility. For instance,
