THE Nigerian currency depreciated against the United States dollar, routing to N902.45/$1 on Friday, January 19, as foreign exchange (FX) demand outweighed supply, despite the Central Bank of Nigeria’s (CBN) clearance of $2bn FX backlog.

The ICIR analysis of transactions in the FX market in the just concluded week shows that the naira depreciated against the dollar by 1.34 per cent at the official market and 6.62 per cent at the black market.

At the official market, the naira, which opened on Monday, January 15, at N890.54/$, closed at N902.45/$1 on Friday, January 19. Similarly, at the black market, the naira opened at N1,269/$1 and closed at N1,353/$1, respectively.

During the week, CBN announced that it had cleared about $2 billion of FX backlog across the manufacturing, aviation, and petroleum sectors.

The CBN spokesperson, Hakama Sidi-Ali, disclosed this in a statement on January 17.

The bank said in the statement that it had cleared the entire foreign exchange forwards liability of 14 banks and would turn its focus on settling the trapped funds owed to foreign airlines.

On January 7, CBN reportedly paid an initial $61 million to address the $800 million owed to foreign airlines.

Meanwhile, Nigeria has about $7 billion in forex forwards that have matured, a significant concern for investors as foreign currency shortages continue to weigh down the naira, despite assurances by CBN to clear the backlog.

The CBN said an independent forensic review of the backlog commissioned showed “grave infractions, gross abuse, and significant non-compliance with market regulations.”

The bank, however, assured that appropriate sanctions would be enforced on offenders in collaboration with relevant agencies.

The apex bank reiterated its commitment to cleaning up the financial services industry to boost market confidence, adding that it would continue to settle legitimate forex backlog to clear all outstanding liabilities.