Afrexim Bank, the African Export-Import Bank, is strategizing to leverage oil traders’ participation in a $3 billion loan for the Nigerian National Petroleum Company Limited (NNPC LTD), aimed at stabilizing the Nigerian Naira.

Sources cited by Reuters have revealed that Afrexim Bank recently initiated discussions with oil traders to assess their interest in providing support for this oil-backed loan to Nigeria’s national oil company, NNPC LTD.

According to these sources, Afrexim Bank has also begun outlining the terms that it intends to present to various trading houses.

This development comes in the wake of Nigeria’s currency experiencing a significant depreciation, with the exchange rate reaching as high as 1000 Naira to one US dollar in the foreign exchange (FX) market.

A senior oil executive familiar with the negotiations commented, “There is a lot of interest, but they need to see the conditions.” However, the executive, who preferred to remain anonymous due to confidentiality constraints, emphasized that a rise in oil prices beyond $90 per barrel could enhance interest.

Meanwhile, NNPC Ltd. had previously announced in August that it had secured an emergency $3 billion crude oil repayment loan, aimed at stabilizing the Naira.

In their statement, NNPC Limited disclosed that the crude-for-cash funding was obtained from the African Export-Import (AFREXIM) Bank, headquartered in Cairo, Egypt. This oil-for-cash loan is intended to support the Naira amid its ongoing depreciation and contribute to stabilizing the foreign exchange market.

This transaction marks the fourth collaborative effort between NNPCL and AFREXIM Bank over the past three years, reinforcing the strong partnership between these entities. Both Nigeria and NNPCL are shareholders in AFREXIM Bank, with the shared goal of fostering investments and prosperity in Africa.

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