• Mon. Dec 11th, 2023

Ndokwa Vanguard

....we are out to educate, inform, sensitize & update

CBN begins clearing Forex backlog owed to banks

Nov 3, 2023

The Central Bank of Nigeria (CBN) has delivered over 75 percent to 80 percent of outstanding matured FX forwards in banks.

The spokesperson of the Central Bank of Nigeria, CBN, Isah Abdulmumin, on Thursday, said it has started clearing outstanding foreign currency forwards owed to banks, with banking sources saying an initial payment of $1 billion had been made.

“The CBN has started paying the FX backlogs to banks. So far, 14 banks have been paid,” Isah Abdulmumin told Reuters but declined to give the amount or name the banks.

According to BusinessDay, a source said only international banks have been settled, which include Citi Bank, Standard Chartered and Stanbic IBTC.

While a few of the lenders were paid the entire amount owed, others got as much as 80% of the backlog, sources told Vanguard.

Nigeria has nearly $7 billion in forex forwards that have matured, which corporations bought from local banks. Banks then repaid foreign credit lines with their own funds when the central bank did not pay out.

The Central Bank’s payments follow Finance Minister Wale Edun’s Oct. 23 announcement that Nigeria was expecting $10 billion of inflows to improve foreign exchange market liquidity. 

It will come as a relief to local lenders, who have been struggling to meet demands from customers due to chronic dollar shortages in Africa’s largest economy.

New Central Bank Governor Yemi Cardoso has said clearing the backlog was a priority but gave no timeline for how long it would take.

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