Are you aware that the foreign exchange challenge (forex), being faced by the foreign airlines in Nigeria, is now being resolved?
It seems the Central Bank of Nigeria (CBN), was not joking when it vowed to clear all foreign airline’s forex backlog.
After so much drama, intrigue, and confusion, foreign airlines in Nigeria, have begun receiving their foreign exchange backlogs.
It was gathered that the Central Bank of Nigeria (CBN), has started clearing over $10 billion foreign exchange backlogs.
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These forex backlogs revolve around foreign airline operators and commercial banks.
Assuring Nigerians, the Apex bank said that it has enough banknotes to go around even in the approaching festive period, calling off allegations of cash in the banking sector.
Reacting to claims of scarcity of cash at banks, automated teller machines (ATMs), and Points of Sale (PoS), in some major cities across the country.
The CBN said the seeming cash scarcity is mainly due to high volume withdrawals from the CBN branches by Deposit Money Banks (DMBs).
It also cited panic withdrawals by customers from the ATMs as reasons why there is a scarcity of cash.
According to a statement emanating from the CBN, there were cases of panic withdrawals in some parts of Nigeria over fears that the banknote could be scarce.
The consideration for this was that people were trying to avoid the 2022 end-of-the-year festivities experienced.
Especially as the bank was yet to comment on the continued use of the redesigned higher denominations of the old currency notes.
The court had extended the use of the old banknotes till December 2023 to allow a better circulation of the new notes.
CBN’s Position On Redesigned Naira
However, the CBN is making its position known on the issue.
“While we note the concerns of Nigerians on the scarcity of cash for financial transactions, we assure the public that there is sufficient stock of currency notes for economic activities in the country.
The branches of the CBN across the country are also working to ensure the seamless circulation of cash in their respective states of operation.
“We urge the public to guard against panic withdrawals as there is sufficient stock to facilitate economic activities.
“Nigerians are advised to embrace our cashless policy, which would reduce pressure on using physical cash,” CBN spokesman Isa AbdulMumin said.
CBN Has Begun Offsetting $10bn Forex Backlogs To Banks
The CBN kickstarts the clearing of forex backlogs to banks with an initial $1 billion payment.
According to a statement released by the CBN, titled ‘Settlement of Matured FX Forwards by CBN.’
The apex bank told its customers that it had cleared all outstanding matured forex.
It reads, “Dear Valued Client, We have been directed to inform you that the CBN has delivered all outstanding matured forward forex.
“We thank you for your patience and cooperation and value you for your business and partnership.
“Please speak with your Relationship Manager or your Trade Service Professional for clarification and additional details.”
Foreign Airlines Trapped Funds Getting Cleared
Foreign airlines have started seeing their trapped funds being released by the CBN.
A staff of one of the foreign airlines revealed that the CBN has started releasing their trapped funds.
“We have started receiving our trapped funds but it’s in tranches,” the source who craved anonymity said.
The director of corporate Communications of the CBN, Isa Abdulmumin, confirmed the news on Thursday.
He said the CBN has started paying the foreign exchange backlogs to banks. So far, 14 banks have been paid.’
He however did not mention the names of the banks nor did he mention how much they were paid.
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While some lenders were paid the entire amount owed, others got as much as 80% of the backlog, the sources said.
Nigeria has nearly $7 billion in forex forwards that have matured, which corporations bought from local banks.
Banks then repaid foreign credit lines with their funds when the central bank did not pay out.
