CBN Releases Another $500 Million to Ease Forex Backlog Crisis

The Central Bank of Nigeria (CBN) has released another US$500 million to various sectors of the economy to address the backlog of verified foreign exchange (forex) transactions. This is the second major intervention by the CBN in a week, following the payment of about US $2.0 billion to the manufacturing, aviation, and petroleum sectors last week.

The Acting Director of the Corporate Communications Department at the CBN, Mrs. Hakama Sidi Ali, made this announcement in Abuja on Monday, January 29. She said the CBN was determined to settle all legitimate forex backlogs in a timely manner.

She also said the CBN had embarked on a comprehensive strategy to improve liquidity in the Nigerian foreign exchange markets in the short, medium, and long term. She quoted the Governor of the CBN, Mr. Olayemi Cardoso, as saying that the CBN’s focus was on addressing the fundamental issues that have affected the smooth functioning of the Nigerian forex markets over the years.

Sidi Ali explained that the forex market reforms were aimed at streamlining and unifying multiple exchange rates, fostering transparency, and reducing arbitrage opportunities. She expressed confidence that a stable exchange rate would boost investor confidence and attract foreign investment.

She, therefore, urged all participants in the market to play by the rules. She also stressed that transparency in the market would enable the fair determination of exchange rates and, by extension, guarantee stability for businesses and individuals alike.

The CBN, over the past few months, has released various sums in its effort to clear the backlog of foreign exchange liabilities. The CBN hopes that these interventions will ease the forex pressure and restore normalcy in the market.