$3.4b loan: IMF may tie approval to exchange rate review

By Collins Nweze

The Central Bank of Nigeria (CBN) may be asked to adjust the naira exchange rate to floating regime as a precondition for the International Monetary Fund (IMF) to approve Nigeria’s $3.4 billion emergency financing loan request

The loan will allow Nigeria to address additional and urgent balance of payments needs and to direct funds to priority health expenditures.

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Other loan requests are also before the African Development Bank (AfDB) and other multilateral institutions. When approved, the loans will be used to address the impact of the coronavirus on the economy.

The decision on whether the IMF will grant the $3.4 billion loan will be taken today when the Fund’s board meets.

At the weekend, the IMF said it would meet on April 28 to consider Nigeria’s request for $3.4 billion in emergency financing to combat the impact of the coronavirus. Nigeria, which is reeling from the twin hits of the oil price collapse and the new coronavirus pandemic, requested the emergency funding under the Fund’s Rapid Financing Instrument.