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The Nigerian National Petroleum Corporation (NNPC) Limited has secured a $3 billion emergency crude repayment loan to support the naira and stabilise the foreign exchange market.
ADULAWO NEWS reports that NNPC Limited secured the crude-for-cash funding from the African Export-Import Bank (Afreximbank) headquarters in Cairo, Egypt.
It was gathered that the NNPC will repay the loan with crude oil at an interest rate between eight percent and 11 percent.
“The NNPC Ltd. and Afrexim 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.”
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.