The National Economic Council has reaffirmed its intention to utilize the $3 billion emergency loan secured by the Federal Government in August to stabilize the fluctuating value of the naira.
The Nigerian currency has experienced volatility in the Investors & Exporters’ window and further depreciation in the parallel market, briefly hitting N1000/$ earlier this month.
CBN’s $3 billion loan
Nasarawa State Governor, Abdullahi Sule, speaking to State House correspondents after the 136th NEC meeting at the Aso Rock Presidential Villa, Abuja, expressed confidence that the loan would be instrumental in addressing the currency’s instability.
He stated, “So, we are very confident and we still believe very strongly that with the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3 billion shall be useful to us down the line.”
The emergency loan, secured from Afrexim Bank by the Nigerian National Petroleum Company Limited on August 16, was intended to alleviate naira pressure.
It would enable the settlement of taxes and royalties in advance and provide essential dollar liquidity to stabilize the currency with limited risk.
Despite these measures, the naira’s fluctuation persisted in the I&E window and worsened in the parallel market, reaching N1000/$.
However, it showed signs of recovery following President Bola Tinubu’s nomination of Olayemi Cardoso as CBN governor, strengthening by N10 against the dollar in the black market, closing at N990/$1 on September 22, 2023.
When asked about the timeline for intervention and the possibility of a supplementary budget, Governor Sule explained that the new CBN leadership was formulating strategies to implement the loan’s objectives.
He emphasized that while the loan had been secured, the process of naira stabilization would take time.
Regarding a supplementary budget, he noted that there was no immediate need for one, as no such requests had been presented to NEC based on current developments.