The Central Bank of Nigeria (CBN) has announced the successful settlement of all valid foreign exchange backlogs, fulfilling a crucial commitment made by CBN Governor, Mr. Olayemi Cardoso, to address an inherited backlog of US$7 billion in claims.
Mrs. Hakama Sidi Ali, the Bank’s Acting Director of Corporate Communications, revealed this development in Abuja on Wednesday, March 20, 2024.
She confirmed that the CBN had recently disbursed $1.5 billion to settle obligations to bank customers, effectively clearing the residual balance of the FX backlog.
Ali further disclosed that independent auditors from Deloitte Consulting meticulously assessed these transactions, ensuring the legitimacy of claims. Any questionable transactions were promptly flagged for further investigation by relevant authorities.
In a recent meeting, Governor Cardoso emphasized the importance of clearing the FX backlog to restore credibility and confidence in the Nigerian economy.
He stated, “We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy. It was important that we go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us.”
The clearance of the foreign exchange transactions backlog aligns with the overarching strategy outlined in the Monetary Policy Committee (MPC) meeting held last month to stabilize the exchange rate and mitigate imported inflation, thereby fostering confidence in the banking system and the economy.
Governor Cardoso has used both 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.
Following this commitment, the CBN reported a significant increase in external reserves this month, rising by $993 million to reach $34.11 billion as of March 7, 2024, marking the highest level in eight months.
The month-on-month increase was primarily driven by a notable surge in remittance payments by Nigerians overseas, as well as increased purchases of local assets, including government debt securities, by foreign investors.
