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The Central Bank of Nigeria (CBN) has fulfilled its promise by announcing the settlement of all valid foreign exchange backlogs totalling $7 billion.
This accomplishment was confirmed by Mrs Hakama Sidi Ali, the apex bank’s Acting Director of Corporate Communications, in a statement released on Wednesday from Abuja.
Independent auditors from Deloitte Consulting meticulously reviewed these transactions to ensure that only legitimate claims were honoured, maintaining transparency and integrity in the process. The CBN recently disbursed $1.5 billion to meet obligations to bank customers, effectively eliminating the residual balance of the FX backlog.
During a recent meeting, Governor Olayemi Cardosoo emphasised the priority placed on clearing the FX backlog to restore credibility and confidence in the Nigerian economy. He stressed the importance of an independent and credible process to verify the authenticity of obligations, affirming that all genuine, verifiable transactions have now been cleared, thus eliminating any encumbrance to market confidence.
The clearance of the foreign exchange transactions backlog aligns with the comprehensive strategy outlined in the previous month’s Monetary Policy Committee meeting. This strategy aims to stabilise the exchange rate, mitigate imported inflation, and bolster confidence in both the banking system and the economy.
Governor Cardoso utilised the MPC meeting and subsequent conference calls with foreign portfolio investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market. In line with these efforts, the CBN reported a significant increase in external reserves this month, climbing by $993 million to reach $34.11 billion as of March 7, 2024, marking the highest level in eight months.
This month-on-month increase was fuelled by a notable surge in remittance payments from Nigerians overseas, along with increased purchases of local assets, including government debt securities, by foreign investors.
