NNPCL’s Fresh $925m Inflow Brings Rare Stability As Naira Gains N15 Against Dollar

The naira has remained firm against the dollar since the country received $925m additional inflow from ‘Project Gazelle Funding Limited’, a crude oil forward sales deal between the Nigerian National Petroleum Company Ltd and the African Export-Import Bank (Afreximbank).

The naira ended the trading week on Friday, June 14, 2024, at N1473.6 per dollar at the Central Bank of Nigeria’s weighted average rates compared to the N1474.7 on Monday, June 3, 2024.

Based on the CBN rate, the naira gained N1.1 during the review period.

In the parallel market, the naira gained N15 from the N1500 per dollar traded on Monday, June 3, 2024, to N1,485 the currency exchanged against the dollar.

The gain made by the currency may be linked to the liquidity injected through the crude oil forward sales deal.

Afreximbank last week announced an additional disbursement of $925m under the syndicated $3.3bn crude oil-backed prepayment facility sponsored by the NNPC Limited.

The fresh disbursement brings the total funded facility size to $3.175bn.

Group Chief Executive of Oando Plc, Wale Tinubu, an indigenous oil and gas company that participated in Project Gazelle said the project would be “instrumental in realizing the federal government’s efforts to boost the country’s socioeconomic indices.”

Nigeria’s foreign exchange reserves have also grown from the $32.75bn on June 3, 2024, to $33.16bn as of June 11, according to the CBN movement of reserves analysed by THE WHISTLER.

Nigeria’s forex reserves grew by $411.1m during the review period.

“The successful disbursement under project Gazelle and its interest in funding viable and strategic projects is a clear indication of investors’ confidence in NNPCL and Nigeria’s growth aspirations,” the Group Chief Executive Officer of the NNPCL, Mele Kyari had said.

The NNPCL has been at the heart of the fight to stabilize the naira since the central bank introduced a managed float in June last year.

Between June 2023 to December 2023, the naira lost 98 per cent of its value trading close to N1000 per dollar as against the N460 traded earlier in June 2023.

In August 2023 the NNPCL in a post tagged “relief for the naira”, said the Afreximbank crude oil forward-sales would disburse funds to support the “government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market”.

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