The Nigerian National Petroleum Corporation (NNPC) Limited has secured a $3 billion crude repayment loan to support the naira and stabilise the foreign exchange market.
NNPC Limited secured the crude-for-cash funding from AFRIEXIM bank headquarters in Cairo, Egypt.
According to reports, the NNPC will repay the loan with crude oil at an interest rate between eight percent and 11 percent.
“The NNPC Ltd. and AfriEXIM bank have jointly signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan,” NNPC said in a terse statement on Wednesday.
“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.”
BREAKING
Relief For The Naira: NNPC Ltd Secures $3billion Emergency Crude Repayment Loan from AFREXIM Bank
The NNPC Ltd. and @afreximbank have jointly signed a commitment letter and Termsheet for an emergency $3billion crude oil repayment loan.
The signing, which took place… pic.twitter.com/KJBsVnZFkJ
— NNPC Limited (@nnpclimited) August 16, 2023
The loan will save Nigeria from approaching the International Monetary Fund (IMF) for loans, and bring respite to the local currency, which had depreciated significantly against the dollar over the past week.
The naira depreciated on Friday to close the week at an all-time low of N950 to the dollar at the parallel market.
Recall that the acting CBN governor, Folashodun Sonubi had after meeting President Bola Tinubu on Monday said the apex bank will roll out its plans to stabilise the naira.
