Naira Records Slight Gains After Nigeria Raises $4bn In Eurobond

Following yesterday’s report of the $4 billion Eurobond Nigeria raised, which was dubbed one of the biggest financial trades to come out of Africa in 2021, Naira appreciated marginally at both the black market and the official window.

On Wednesday, the naira gained 0.02% versus the dollar, closing at N413.18/$1, up from N413.28/$1 on Tuesday, September 21, 2021. Between Monday and Wednesday, the currency rate has averaged N413.38/$1.

The daily foreign exchange market turnover increased by 14.49% to $229.72 million on Wednesday, up from $200.65 million on Tuesday.As a result, the dollar was quoted at N413.18 after trade on Wednesday, up from N413.28 on Tuesday, marking a 0.02 per cent increase, according to FMDQ statistics.

Similarly, the parallel market exchange rate appreciated to N572/$1 on Wednesday, up from N575/$1 the day before, according to data gathered by Nairametrics from licensed BDC operators in Lagos.

This progress comes after Nigeria had raised the sum of $4 billion through Eurobonds which were issued in three tranches.

According to the DMO, the Order Book peaked at $12.2 billion which enabled the FGN to raise $1 billion more than the $3 billion it initially announced.

The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023.

The mobilization of $4 billion through Eurobonds, which was part of the New External Borrowing in the 2021

Appropriation Act, provides a considerable amount of capital to finance projects in the Act, thereby helping the implementation of the Act, according to the DMO.

Although, some analysts believe that the marginal gains of the Naira were caused by the FG’s success in the bond market. Others hold that the gains are too small to strengthen the Naira in the long run.