CBN Clears $7bn Forex Backlogs

The Central Bank of Nigeria (CBN) has announced that all valid foreign exchange backlogs have now been settled, thereby fulfilling a key pledge of the CBN governor, Olayemi Cardoso, to process an inherited backlog of US$7 billion in claims.

This was revealed in a statement on Wednesday by the bank’s Acting Director of Corporate Communications, Mrs Sidi Ali.

Mrs Ali 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.

The CBN followed this month by reporting a significant increase in external reserves, rising by $993m to $34.11bn as of March 7, 2024, the highest level in eight months.

The month-on-month increase was driven by a marked advance in remittance payments by Nigerians overseas, as well as higher purchases of local assets, including government debt securities, by foreign investors.

Ali emphasized that meticulous efforts were undertaken to settle these outstanding transactions.

Notably, the CBN recently completed the payment of $1.5bn, resolving obligations to bank customers and thereby clearing the residual balance of the FX backlog.

The CBN revealed that independent auditors from Deloitte Consulting meticulously assessed each transaction, ensuring that only legitimate claims were honoured.

The apex bank expressed that all invalid transactions were promptly flagged for further scrutiny by relevant authorities.

According to the statement, “The Central Bank of Nigeria has announced that all valid foreign exchange backlogs have now been settled, fulfilling a key pledge of the CBN Governor, Mr Olayemi Cardoso, to process an inherited backlog of $7bn in claims.

“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 expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.”