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Economy: How CBN settles ‘legitimate’ residual balance of Forex transaction backlogs –Cardoso

*Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, affirms the Bank has made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy

Isola Moses | ConsumerConnect

In prioritising the clearing the Foreign Exchange (Forex) backlog to restore credibility and confidence in the economy, the Central Bank of Nigeria (CBN) has announced that all “valid” Foreign Exchange backlogs of $7 billion have now been settled.

Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications at CBN, disclosed this development in a statement issued Wednesday, March 20, 2024, in Abuja, FCT.

The Bank, in the statement, confirmed that independent auditors from Deloitte Consulting meticulously assessed those transactions, ensuring that only legitimate claims were honoured in the process.

ConsumerConnect had reported the Dr. Olayemi Cardoso, Governor of CBN, in a recent interview aired on Arise News, a local television station, had pledged that the country’s banking sector regulator would offset the outstanding valid transactions of over $2billion.

The Acting Director of Corporate Communications also 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 Forex backlog.

Cardoso, in a recent meeting, reportedly stated: “We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy.

“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.”

It is also recalled that clearance of the Foreign Exchange transactions backlog was part of the overall strategy detailed in the Monetary Policy Committee’s (MPC) meeting held February this year, as part of measures aimed at stabilising the exchange rate and curb imported inflation while boosting confidence in the banking system and the entire Nigerian 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 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, according to report.

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