CBN Must Spend $3bn Loan To Stabilise Economy – NEC

The National Economic Council confirmed on Thursday that the Federal Government’s $3 billion emergency loan for crude oil secured in August would be used to stabilize the naira, whose value has continued to fluctuate in the Investors & Exporters window and worsened in the parallel market, reaching N1000/$ earlier this month.

Addressing State House correspondents following the 136th NEC meeting at the Aso Rock Presidential Villa in Abuja, Nasarawa State Governor Abdullahi Sule 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 $3bn shall be useful to us down the line.”

On August 16, the Nigerian National Petroleum Corporation (NNPC) Limited revealed that it secured an emergency $3bn crude repayment loan from Afrexim Bank to relieve pressure on the naira.

they stated that the financing will allow them to pay taxes and royalties in advance. It would also provide the Federal Government with the required dollar liquidity to stabilize the naira while posing little risk.

The naira, on the other hand, has continued to fluctuate in the I&E window and deteriorated in the parallel market, reaching N1000/$ the week before last. On Friday, September 22, 2023, it rebounded after President Bola Tinubu nominated Olayemi Cardoso as CBN governor. In the black market, the naira rose by N10 versus the dollar, finishing at N990/$1.

When asked when the intervention would begin and whether a supplementary budget would be required, Sule stated, “The $3 billion that was taken in order to stabilize the naira. As you can see, we have a new team at the CBN and the new team that is just coming in is asking for a little bit of time in order to work out the modalities.

“It is one thing to take the loan it is another to plan the process of the stabilisation because it’s going to take a while.

“The CBN governor was just confirmed a few days back and he started rolling out his plans of what to do.”

On the supplementary budget, Sule “Supplementary budget is a request that will come as a result of whatever is happening right now. I’m not sure there is a need for a supplementary budget immediately. So far, there have been no supplementary budget requests that were presented to NEC.”

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