Nigeria's Eurobonds rose by as much as 1.4 cents on the dollar.  / Photo: AFP

Nigeria's sovereign dollar-denominated bonds rose on Thursday after investment banker Olawale Edun was appointed finance minister and the national oil company secured an emergency loan, as President Bola Tinubu seeks to recalibrate Africa's largest economy.

The West African oil producer's Eurobonds rose by as much as 1.4 cents on the dollar, having plunged from a recent peak on Aug. 1. The note mat uring in 2051 was the strongest performer, up 1.399 cents to 72.014 cents at 1041 GMT.

Edun, one of Tinubu's closest advisers and a figure investors hope will help steer Nigeria onto a more reformist, market-friendly path, had long been tipped to become finance minister. Nigeria's Eurobonds rallied after Tinubu came to power in May.

He immediately axed a costly but popular fuel subsidy and soon after devalued the naira currency, reforms long demanded by investors.

However, Nigeria is reliant on fuel imports and still suffering dollar shortages, leading petrol retailers to call for further price increases as the weakening naira has made fuel more expensive to import.

Tinubu's spokesman said on Tuesday that petrol prices did not need to rise more, which investors fear could mean the fuel subsidy will be reintroduced.

Late on Wednesday, Nigeria's state oil firm NNPC said it had secured an emergency $3 billion crude oil repayment loan from the Cairo-based African Export-Import Bank.

It said on social media platform X, formerly known as Twitter, that funds would be immediately disbursed to support the "government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market".

The naira gained sharply on the black market, quoted at 860 to the U.S. dollar, compared to the record low of 960 seen earlier in the week. It is currently trading at 780 officially.

Nigeria's Eurobonds had also dropped when the Central Bank of Nigeria (CBN) revealed last week that it had $19 billion in derivatives commitments.

"Net FX reserves are significantly lower than previously estimated," JP Morgan analysts said in a note to clients on Thursday. "We estimate that CBN's net FX r eserves were around US$3.7 billion at the end of last year, from US$14.0 billion at end-2021."