Spokesperson of the Central Bank of Nigeria (CBN), Mrs Hakama Sidi Ali has identified the clearing of the foreign exchange transactions backlog as part of the overall strategy to stabilise the exchange rate and thereby curb what it called “imported inflation.”
In a statement in Abuja, Mrs Hakama Sidi Ali said that such measure was detailed in last month’s Monetary Policy Committee meeting.
She announced that through gradual and meticulous processes, the apex bank had finally cleared all valid foreign exchange backlogs, thereby fulfilling a key pledge of the CBN Governor, Olayemi Cardoso, to process an inherited backlog of US$7 billion in claims.
Hakama Sidi Ali 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.
She sad that independent auditors from Deloitte Consulting meticulously assessed these transactions to ensure that only legitimate claims were honoured, saying that any invalid transactions were promptly referred to the relevant authorities for further scrutiny.
She recalled that at a recent meeting, Governor Cardoso had vowed to make clearing the FX backlog a priority to restore credibility and confidence in the economy.
She quoted him as saying: “it was important that we go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us.”
She said that 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.
According to the spokesperson, the CBN followed this month by reporting a significant increase in external reserves, rising by $993 million to $34.11 billion as of March 7, 2024, the highest level in eight months.
“The month-on-month increase was driven by a marked advance in remittance payments by Nigerians overseas, as well as higher purchases of local assets, including government debt securities, by foreign investors.”
