CBN Has Settled $2.3bn Verified FX Backlogs and Will Clear Outstanding $2.2bn Contracts Soon
The Central Bank of Nigeria has settled $2.3 billion foreign exchange contract backlogs, including that of the foreign airline funds that have been trapped. Mr Yemi Cardoso, the Governor of the CBN, disclosed this in an exclusive interview on the Arise News channel.
According to him, with the $2.3bn settled, the valid outstanding verified FX contracts to be cleared by the CBN is $2.2bn. He said the CBN under his watch inherited the backlogs and was committed to clearing them soon.
He said, “When we came into office, we were told that the FX backlogs and contracts not settled was approximately $7bn. We contracted Deloitte to help us audit what was valid for payment. Of the $7bn, about $2.4bn had no business in the FX backlogs due to issues of invalid import documents and entities that did not exist, amongst other infractions.”
Mr. Cardoso assured that the CBN is looking aggressively at improving the supply side of the FX market. He noted that many deposit money banks had no business holding FX and had been asked to sell their positions to customers.
With the ongoing reforms in the foreign exchange market, he alluded to the point that the difference between the official and parallel market is minimal and serves as a disincentive to arbitrage.
He added that the focus was to ensure that volatility is reduced, and transparency is entrenched in the foreign exchange market.
On the recent directives on IMTOs, he stressed that the emphasis is bringing more transactions through the formal market which is important for the foreign exchange market.
He maintained that the Nigerian currency, the “Naira”, was undervalued due to panic and reiterated that there was no truth in the news that the CBN was planning to convert the domiciliary account of Nigerians to naira.
Speaking ahead of his first monetary policy committee meeting scheduled for February 26th and 27th, 2024 he said, “The Transmission between the MPC meeting and money market was questionable. The CBN wants to position the MPC to be impactful on the economy, through the right signaling.”
