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Central Bank of Nigeria (CBN) Settles Almost $2 Billion in Forward Liabilities to Strengthen Naira
The Central Bank of Nigeria (CBN) has confirmed that it settled almost $2 billion of forward liabilities in the past three months.
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The Acting Director of Corporate Communications, Mrs. Hakama Sidi-Ali, stated that these payments are part of the CBN’s ongoing efforts to settle all remaining valid forward transactions, aiming to alleviate pressure on the country’s exchange rate.
In addition to redeeming outstanding forward liabilities, the CBN’s initiative is expected to significantly strengthen the Naira against major world currencies and enhance investor confidence in the Nigerian economy.
Mrs Hakama Sidi-Ali emphasized the CBN’s commitment to resolving pending obligations and ensuring a functional foreign exchange market.
The Governor of the CBN, Yemi Cardoso, estimated that the figure owed to international businesses operating in Nigeria is in the region of $7 billion or more.
Settling the foreign exchange (FX) backlog is seen as a crucial step to relieve pressure on the Naira, which has experienced a significant loss in value on the official window since the unification of the FX market on June 14, 2023.
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The Naira was last exchanged for N869.13 to the USD on the official window, while on the parallel market, it traded at N1255/$1.
Reports in November indicated that the Central Bank of Nigeria had started settling the FX backlog for businesses operating in the country. Multinational companies, such as PZ Cussons, confirmed cash repatriation, with hopes to complete total cash repatriation by the end of 2024.
The Central Bank of Nigeria had previously announced in September 2023 that it would clear the FX backlog, amounting to around $10 billion, within two weeks.
The recent settlements demonstrate the central bank’s continued efforts to stabilize the foreign exchange market and enhance the overall economic outlook of Nigeria.
