CBN clears valid FX backlog as external reserves rise to $34.11bn

THE Central Bank of Nigeria (CBN) said it had cleared all valid foreign exchange(FX) backlogs.

The Bank disclosed this through its Acting Director of Corporate Communications, Hakama Sidi Ali, in Abuja on Wednesday, March 20.

Ali said the action fulfilled “a key pledge of the CBN Governor, Olayemi Cardoso, to process an inherited backlog of US$7 billion in claims.”

She noted that the CBN recently concluded the payment of $1.5 billion to settle obligations to bank customers, effectively settling the residual balance of the FX backlog.

She also disclosed that independent auditors from Deloitte Consulting ‘meticulously’ assessed these transactions, ensuring that only legitimate claims were honoured.

“Any invalid transactions were promptly referred to the relevant authorities for further scrutiny,” the CBN spokesperson added.

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The ICIR reported that Cardoso had confirmed clearing the FX backlog for the aviation sector when international airlines threatened to halt their operations in Nigeria.

“We made clear the FX backlog a priority to restore credibility and confidence in the Nigerian economy.

“We needed to go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us,” Cardoso recently said.



    Notably, clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee meeting to stabilise the exchange rate and thereby curb imported inflation, spurring confidence in the banking system and the economy.

    Cardoso used the MPC meeting and a subsequent conference call with foreign portfolio investors to set targets for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.

    On the heels of this clearance, CBN reported a significant increase in external reserves, rising by $993 million to $34.11 billion as of March 7, 2024, the highest level in eight months.

    The CBN confirmed further that the month-on-month increase was driven by a marked advance in remittance payments by Nigerians overseas and higher purchases of local assets, including government debt securities by foreign investors.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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