The Central Bank of Nigeria (CBN) has embarked on a promising journey to eliminate the backlog of matured forex forwards in banks.
This significant step is rekindling hope and rebuilding confidence in the Nigerian forex market.
Recent reports reveal that CBN has successfully delivered over 75 to 80 percent of outstanding matured FX forwards in banks.
This is a pivotal development that hints at a brighter future for Nigeria’s forex landscape.
Notably, the central bank has focused on settling obligations with international banks. Institutions such as CitiBank, Standard Chartered, and Stanbic IBTC have been among the early beneficiaries of this initiative.
It’s not just CBN working to clear backlogs; banks themselves are actively participating in this process.
Their concerted efforts are contributing to the overall success of this endeavor.
A positive ripple effect can be seen in the airline industry, as airlines also witness their backlogs being cleared.
This development bodes well for a sector that has faced its share of challenges.
While the progress is evident, the source of supply used to clear the backlog remains a mystery.
It is unclear whether these funds are coming from the government’s announced plans.
The government had previously declared its intention to clear forex backlogs by injecting a substantial $10 billion.
This capital infusion was anticipated to come from the securitization of dividends from NLNG and the NNPCL deal.
Reports from Stanbic IBTC corroborate the clearing of forex backlogs, further reinforcing the positive trajectory of this endeavor.
“In a significant move, the apex bank initiated the clearing of outstanding Retail SMIS obligations.
While the exact total remains to be determined, this step demonstrates a strong commitment to addressing the backlog.”
