mobilize $10 billion for the Federal Government to ease liquidity crunch in the nation’s foreign exchange market, it has been revealed.
Worried by the decline in the value of the Naira, President Bola Tinubu and the Central Bank of Nigeria (CBN) had intervened in a bid to stabilize the struggling currency floated by the apex bank some months ago.
Out of the $10 billion of inflows being expected by the Federal Government as announced early this week, $7.0 billion is expected from NNPCL’s forward sales while $3.0 billion is coming from Qatar.
“The inflows will help ease a liquidity crunch weighing on the Naira,” an industry source said.
Persecondnews recalls that the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, had said at the Nigerian Economic Summit in the capital, Abuja, on Monday that the government has a “line of sight” on the inflows into the country in weeks rather than months.”
According to Edun, the inflows will add to other steps being taken by the government to boost foreign exchange liquidity, including improving market transparency and allowing domestic entities to issue foreign-exchange instruments.
However, both the fiscal and monetary authorities have shown commitment to improving the FX liquidity in the country, upside potential for the Naira might be in the offing in the near to medium term.
“For context, the government plans to raise $10.0 billion, The expected inflows could be higher if the government can obtain the $3.0 billion Afrexim bank loan and can get the World Bank facility of $5.0 billion ($3.5 billion for project development and $1.5 billion to support key policy reforms),” a source said.
