Nigeria's External Reserve Rises by 0.39% in 2024 After $2.2bn Afreximbank Loan

Nigeria's external reserve has increased by 0.39% or $0.13 billion in 2024, following the inflow of $2.2 billion from the African Import-Export Bank (Afreximbank). According to data from the Central Bank of Nigeria (CBN), the reserve rose to $33.042 billion as of January 3, 2024, compared to $32.912 billion recorded on Friday, the last trading day of 2023.


The loan from Afreximbank is part of a $3.3 billion facility to support Nigeria's foreign exchange market and address the acute FX shortage that has hampered the economy. The Minister of Finance, Wale Edun, said that the loan had secured the approval of President Bola Tinubu and would help to clear the backlog of FX demand.


The FX market also reacted positively to the loan announcement, as the naira appreciated by 15.62% against the US dollar on Thursday, January 4, 2024. The naira was quoted at N895.23 to a dollar, stronger than N1,035.12 quoted on Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM). The daily FX market turnover also increased by 20.06% to $68.49 million on Thursday from $85.68 million recorded on Wednesday.


Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said that the loan from Afreximbank would help to stabilize the market further and boost the confidence of investors and businesses. He also urged the CBN to adopt a more flexible and transparent FX management system to enhance the efficiency and effectiveness of the market.



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