CBN Initiates “Clearing” Of Forex Backlogs – Recent Updates

Recent reports have revealed that the Central Bank of Nigeria (CBN) is clearing the forex backlogs that banks and airlines have been facing.

According to sources familiar with the matter, banks claim that the central bank is actively addressing these backlogs.

Airlines are also witnessing the clearance of their forex backlogs, but the exact source of the supply used to clear these backlogs remains uncertain. It’s worth noting that the government previously announced plans to address this issue by injecting $10 billion into the system.

Stanbic IBTC’s report has also supported the information about the clearing of forex backlogs, stating, “Yesterday, the apex bank began clearing the backlog of outstanding Retail SMIS obligations. The total amount cleared is yet to be ascertained.”

This story is currently developing, and more updates are expected.

Meanwhile, it was reported that Mr. Folashodun Adebisi Shonubi, the Acting Governor of the Central Bank of Nigeria (CBN), intends to shut down the non-electronic Bureau De Change (BDC).

Shonubi had disclosed that both banks and the central bank worked diligently to clear the backlog of foreign exchange in the country. Plans were also in motion to shut down non-electronic Bureau De Change (BDC).

Shonubi made these remarks in Lagos when questioned about the ongoing challenges in the forex market. The FX backlogs, representing unmet forex demands, amounted to an estimated $10 billion, causing significant losses for many companies, as per industry insiders.

He noted, “Various banks, in collaboration with the CBN, were actively addressing these backlogs through various means. The goal was to clear these backlogs within one to two weeks. A substantial portion of these obligations had already been assumed by Nigerian banks, ensuring the availability of financing for importers at maturity.”

Regarding the devaluation of the Naira, he explained, “Our role as the central bank is to maintain price stability. We aim not to be a dominant player in the forex market but to intervene when necessary. Unfortunately, there is a lack of understanding between BDCs and the black market.”

He continued, “Instead of fulfilling their primary function, some BDCs divert foreign currency to the black market. We are in the process of phasing out non-electronic BDCs to ensure a smooth and transparent forex market.“