CBN targets swift resolution of $10bn forex backlogs in two weeks
… Apex bank contributes less than 25% of total volume — CBN Acting Gov.
The Central Bank of Nigeria (CBN) has recently revealed its
intention to resolve the unmet demand for foreign exchange (FX) among investors and exporters. To achieve this, the CBN aims to eliminate the existing $10 billion FX backlogs within the next one to two weeks.
This revelation was made by the acting governor of the CBN, Folashodun Adebisi Shonubi during a conference held in Lagos on Monday.
The accumulation of FX backlogs has caused significant losses for numerous firms, according to analysts.
Shonubi emphasised the urgency of resolving this issue.
By addressing the backlogs, Shonubi assured that the lingering obligation overhang, which has been a topic of concern, will be eliminated.
This move is expected to provide relief to businesses and investors who have been grappling with the impact of the backlogs on their operations.
Shonubi also clarified the CBN’s role in the FX market, stating that the bank contributes less than 25 percent of the total volume.
He emphasised that the CBN’s intervention is aimed at stabilising rates rather than being a regular player in the market.
“Today we still intervene in the market, so it’s not as if it has affected our ability to make monies available to banks in the Nigerian foreign exchange market (NAFEX), but when you look at the volumes, I think again we overemphasise what the role and depth of the CBN intervention is,” he explained.
The CBN’s efforts to clear the FX backlogs are expected to restore confidence in the Nigerian economy and provide a boost to businesses that have been affected by the unmet demand for forex. With the resolution of this issue, the CBN aims to create a more stable and conducive environment for investors and exporters in Nigeria.
“Today we still intervene in the market so it’s not as if it has affected our ability to make monies available to banks in the Nigerian foreign exchange market (NAFEX) but when you look at the volumes, I think again we overemphasise what the role and depth of the CBN intervention is.”
He said the CBN contributes less than 25 per cent into the FX market and that the aim, about a year and a half ago, was that the Central Bank did not want to be a regular player, but more of intervening to stabilise the rates.
“There’s so much more foreign exchange that people don’t talk about, that has been made available through the banking system that banks are selling to their customers. It doesn’t come to the central bank, it doesn’t appear as part of the demand that comes to us, and it is significant. It is almost three times what we as a Central Bank make available. So, the summary is we hope to clear the backlog. Maybe in the next two weeks, through different structures that are there,” he said.
Shonubi refutes claims of a $7.5 billion debt to JP Morgan, stating that there is no such outstanding amount owed to the American bank. The report, which has gained widespread attention, is based solely on JP Morgan’s opinion that was documented and circulated.
