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Akinwande Soji-Ojo
The Central Bank of Nigeria (CBN) has cleared the $7 billion foreign exchange (FX) backlog inherited by Governor Yemi Cardoso.
A statement issued on Wednesday by CBN’s Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, confirmed settlement of all the valid FX backlog claims
This move fulfills a key pledge of Cardoso on his appointment and signifies a significant step towards restoring confidence in the economy.
According to Ali, CBN employed Deloitte Consulting, an independent auditing firm, to meticulously assess the transactions, ensuring that only legitimate claims were honoured.
“Any invalid transactions were referred to the relevant authorities for further investigation,” she added.
She said 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.
Clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee (MPC) 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.
The CBN’s commitment to tackling the FX backlog appears to be paying off, as external reserves have seen a significant rise, reaching $34.11 billion as of March 7, 2024, the highest level in eight months
This month-on-month increase is attributed to a notable rise in remittance payments from Nigerians abroad and increased foreign investment in local assets, including government debt securities.