TheCable

The Central Bank of Nigeria (CBN) says it has released $500 million to various sectors to address the backlog of verified foreign exchange (FX) transactions.

The development comes barely a week after the bank “paid $2.0 billion” to settle outstanding commitments across manufacturing, aviation, and petroleum sectors.

Hakama Sidi-Ali, acting director of the corporate communications department at the CBN, spoke on the disbursement in Abuja on Monday.

She said the management of the CBN is dedicated to settling all legitimate FX backlogs within a short period.

Reiterating the assurances of Olayemi Cardoso, CBN’s governor, Ali said the apex bank had started implementing a comprehensive strategy to improve liquidity in the Nigerian FX markets in the short, medium, and long term. 

“As the Governor said, the CBN’s focus is on addressing fundamental issues that have hindered the effective operation of the Nigerian FX markets over the years,” she said.

Sidi-Ali noted that the FX reforms were designed to streamline and harmonise multiple exchange rates, promote transparency, and lessen the likelihood of arbitrage opportunities.

Ali also expressed optimism that a stable exchange rate would boost investor confidence and attract foreign investment.

Therefore, the CBN spokesperson called on all participants in the FX market to play by the rules.

Ali said transparency in the market would allow for fair determination of exchange rates and consequently, guarantee stability for both businesses and individuals.

The apex bank had, in November 2023, started clearing the FX forwards backlog in banks.

Meanwhile, on January 7, 2024, the bank disbursed $61.64 million to foreign airlines through various deposit money banks (DMBs).