Central Bank Of Nigeria Clears $7bn Forex Backlogs

The Central Bank of Nigeria has announced that it has cleared all valid foreign exchange backlogs, effectively removing a legacy burden.

This accomplishment fulfills a commitment made by CBN Governor, Mr Olayemi Cardoso, who promised to address an inherited backlog of $7bn in claims.

The announcement was made by the bank’s Acting Director of Corporate Communications, Mrs Sidi Ali, in a statement issued on Wednesday.

The CBN followed this month by reporting a huge increase in external reserves, increasing by $993m to $34.11bn as of March 7, 2024, the highest level in eight months.

The month-on-month increase was driven by a marked advance in remittance payments by Nigerians overseas, as well as higher purchases of local assets, including government debt securities, by foreign investors.

Ali emphasized that careful efforts were undertaken to settle these outstanding transactions.

Notably, the CBN recently completed the payment of $1.5bn, settling obligations to bank customers and thereby clearing the residual balance of the FX backlog.

The statement partly reads, “The Central Bank of Nigeria has announced that all valid foreign exchange backlogs have now been settled, fulfilling a key pledge of the CBN Governor, Mr Olayemi Cardoso, to process an inherited backlog of $7bn in claims.

“Clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee meeting to stabilise the exchange rate and thereby curb imported inflation, spurring confidence in the banking system and the economy.

“Cardoso used the MPC meeting and a subsequent conference call with foreign portfolio investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.”