In its determination to address the backlog of verified foreign exchange transactions, the Central Bank of Nigeria (CBN) has released $500m to various sectors.
This comes barely a week after the apex bank paid approximately $2bn to settle outstanding commitments across manufacturing, aviation, and petroleum sectors.
The Acting Director of the Corporate Communications Department at the CBN, Mrs. Hakama Sidi Ali, stated this in Abuja on Monday, noting that the management of the CBN was committed to settling all legitimate foreign exchange backlogs within a short time frame.
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Reiterating the assurances of the Governor, Mr. Olayemi Cardoso, Sidi Ali, said the CBN had begun implementing a comprehensive strategy to improve liquidity in the Nigerian foreign exchange markets in the short, medium, and long term.
“As the Governor said, the CBN’s focus is on addressing fundamental issues that have hindered the effective operation of the Nigerian FX markets over the years,” she added.
While noting that the forex market reforms were designed to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities, Sidi Ali expressed confidence that a stable exchange rate would boost investor confidence and attract foreign investment.
She, therefore, urged all participants in the market to play by the rules, stressing that transparency in the market would enable the fair determination of exchange rates and, by extension, guarantee stability for businesses and individuals alike.
It will be recalled that the CBN, over the past few months, has released various sums in its effort to clear the backlog of foreign exchange liabilities.
Since the managed float policy of the CBN began in June 2023, the naira has been under pressure depreciating from around N700 to over N1,200 by end of 2023.
The CBN Governor had linked the expected stability in the foreign exchange market in 2024 to the reduction in petroleum product imports and the market-determined exchange rate.
Cardoso said, “We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years.
“Upholding the integrity of financial markets is crucial for building confidence. With the completion of an independent forensic review and the subsequent clearance of the backlog of valid FX transactions, we remain steadfast in our commitment to decisively address any infractions and abuses.
“In our efforts to stabilize the exchange rate, it is imperative that we prioritize transparency and create a market environment that enables the fair determination of exchange rates, ensuring stability for businesses and individuals alike.”