CBN Grants Special Forex To Airlines

[caption id="attachment_12780" align="alignnone" width="640"]Godwin Emefiele, CBN Governor[/caption]

In a bid to restore the aviation sector, The Central Bank of Nigeria (CBN), on Thursday, granted a Special Secondary Market Intervention Retail Sales (SMIS) for airlines operating in the country.

Mr James Odaudu, Deputy Director, Press and Public Affairs, Ministry of Transportation, who announced the plan in Abuja on Friday explained that the intervention was a direct result of the interaction with CBN by the Minister of State, Aviation, Sen. Hadi Sirika, on behalf of the airlines.

According to him, other critical sectors to benefit from the exercise dedicated to the clearance of the backlog of matured Foreign Exchange obligations are raw materials and machineries for manufacturing companies and agricultural chemicals.

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He said the decision by the apex bank to intervene in the Inter-Bank Forex market is expected to stimulate market confidence, ensure access to Forex by the airlines to settle their obligations and sustain the integrity of the Nigerian Foreign Exchange market.

“The import of this peculiar exercise is that the CBN will not apply the relevant provisions under clause 2.4.3 (i) of its Revised Guidelines for the Operation of the Nigerian Inter-Bank Foreign Exchange Market,” Odaudu said.

“It provides that ‘all SMIS bids shall be submitted to the CBN through the FXPDs.

“Consequently, CBN shall receive bids from all the authorised dealers.

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“The CBN will also not apply the relevant provisions that ‘Spot Forex sold to any particular end-user shall not exceed one per cent of the overall available funds on offer at each SMIS session.

“According to the CBN, whereas the bids are on Spot Forex basis as the Authorised Dealers’ accounts with the CBN will be debited in full for the naira equivalent of the dollar bid amount.
“The CBN will settle the bids through forward settlements of two months.’’

Odaudu further advised customers that are not willing to accept the settlement terms not to participate in this Special SMIS Retail.

Odaudu credited Sirika as describing the special intervention by CBN as a “great relief’’ for airline operators in the country.

Reacting to the development, Minister of State for Aviation has described the special intervention by the Central Bank as a great relief for airline operators in the country who have complained bitterly over their inability to access the required Foreign Exchange to settle their backlog of obligations and which has adversely affected their operations.

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According to the Minister, the Aviation Sector is so critical to the nation’s security and global image that it cannot be overlooked or toyed with, saying that the apex bank has taken the right decision that would not only strengthen existing airlines, but also inspire confidence in aspiring operators in Nigeria’s aviation industry.

The News Agency of Nigeria (NAN) recalls that airline operators at a recent meeting with the minister complained of a lack of access to Forex.

About 14 airlines have withdrawn from Nigeria due to the current economic recession facing the country.

The operators had reportedly complained bitterly over their inability to access the required Foreign Exchange to settle the backlog of their obligations which had adversely affected their operations.

The airlines were said to have lost about N64 billion in the wake of the new foreign exchange (forex) policy of the Central Bank of Nigeria (CBN).

Also, Aero Contractors Airlines, the second biggest airline in Nigeria on 1st September shuts down all scheduled commercial flight operations in the country.

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