Forex backlog: CBN pumps additional $500m
By Sodiq Adelakun
The Central Bank of Nigeria (CBN) has taken decisive action to alleviate the persistent backlog of confirmed foreign exchange (forex) transactions by introducing an additional $500 million into the market.
This strategic move follows closely on the heels of a substantial $2 billion injection the previous week, aimed at clearing outstanding obligations in key sectors such as manufacturing, aviation, and petroleum.
On Monday, January 29, in the nation’s capital, Abuja, Mrs. Hakama Sidi Ali, who is serving as the Acting Director of the Corporate Communications Department at the CBN, disclosed these developments.
She emphasised the bank’s unwavering resolve to swiftly address all legitimate forex backlogs. “The CBN’s management is dedicated to resolving all legitimate foreign exchange arrears promptly,” Sidi Ali declared, providing a sense of reassurance to stakeholders.
Furthermore, Sidi Ali conveyed to the Nigerian populace that the CBN is not only tackling immediate liquidity challenges but is also deploying a holistic strategy designed to enhance the flow of foreign exchange in the Nigerian market across short, medium, and long-term horizons.
She elaborated that this comprehensive plan is tailored to confront and rectify the core issues that have historically impeded the smooth functioning of Nigeria’s forex markets.
“As the Governor has articulated, our focus at the CBN is to tackle the root problems that have long obstructed the efficient operation of the Nigerian FX markets,” Sidi Ali stated, underscoring the bank’s strategic focus.
She added, “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.”
The forex market reforms, Sidi Ali explained, are designed to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities. She expressed confidence that a stable exchange rate would boost investor confidence and attract foreign investment.
She said, “We believe that a stable exchange rate will boost investor confidence and attract foreign investment.”
Sidi Ali urged all participants in the forex market to play by the rules, emphasising that transparency in the market would enable the fair determination of exchange rates and, by extension, guarantee stability for businesses and individuals alike.
She said, “We urge all participants in the market to play by the rules. Transparency in the market will enable the fair determination of exchange rates and, by extension, guarantee stability for businesses and individuals alike.”
The CBN’s latest intervention is part of a series of measures taken by the bank in recent months to address the forex backlog.
Over the past few months, the bank has released various sums in its effort to clear the backlog of foreign exchange liabilities.
