Naira has marked its third gain against the dollar in the official market in the New Year.
Gatekeepers News reports that on Monday, January 8, 2024, the naira gained 1.45% against the dollar to close at N856.57 at the official market.
This was according to data from the NAFEM where forex is officially traded.
The gain represents an N12.56 gain or a 1.45% increase in the local currency compared to the N869.13 closed the previous day.
Recently, Afreximbank released $2.25 billion out of the $3.3 billion foreign exchange (FX) support facility to Nigeria’s FG to relieve the acute liquidity shortage in the country’s FX market.
This pivotal agreement was officially signed on December 29, 2023, marking a milestone in the financial cooperation between the involved entities, who also recently signed a $150 million deal.
In this strategic financial arrangement, Afreximbank fulfils its role as the Mandated Lead Arranger.
This works in close coordination with the United Bank for Africa, which assumes the responsibility as the Local Arranger, with NNPC Limited acting as the principal financier when the facility is successfully finalised.
The arrangement also includes Guvnor and Sahara Energy as key participants in the transaction, highlighting the collaborative effort of multiple stakeholders.
The total transaction value obtained through Afreximbank to help boost dollar supply towards alleviating Nigeria’s current FX supply challenges in the NAFEM official trading window is US$3.3 billion.
Meanwhile, the first tranche of the transaction amounts to US$2.25 billion. This sum will be deposited into a designated account at the Central Bank, and it is expected to ease forex liquidity pressures.
UBA is also functioning as the Onshore Depository Bank for this arrangement.
NNPC Ltd is facilitating the financing of this transaction, acting as a lender, while Sahara Energy, Vitol, Oando, and Gunvor are the other major oil trading firms involved as sub-lenders.
In addition to their roles in the transaction, UBA, Sahara Energy, Vitol, Oando, and Gunvor contributed $100 million to the facility.
On the other hand, despite the injection of FX liquidity at the official market and a substantial clearance of FX backlogs by the CBN, the value of the naira fell significantly on Tuesday at the Parallel market and physical black market.
In the earlier hours of Tuesday, the naira traded at about N1230/$ from Monday’s rate of N1220/$.
In addition, the exchange rate for a dollar to naira on the physical black market buy averaged at about N1,245 against the greenback on Tuesday.
