CBN pays $2bn forex forwards with banks

The Central Bank of Nigeria (CBN) said it has, in the past three months, redeemed outstanding forward liabilities amounting to almost $2 billion.

The apex bank also said it recently disbursed approximately $61.64 million to foreign airlines through various banks, with a focus on decreasing its remaining liability to the airlines.

The latest move is in fulfilment of its commitment to eliminate the backlog of pending matured foreign exchange in Deposit Money Banks (DMBs), acting director of the corporate communications department at the CBN, Mrs Hakama Sidi Ali, claimed in a statement in Abuja.

Ali disclosed that, in the past three months, the CBN had also redeemed outstanding forward liabilities amounting to almost $2 billion.

“This underscores the bank’s commitment to the resolution of pending obligations and a functional foreign exchange market,” she said.

According to her, these payments signify the CBN’s ongoing efforts to settle all remaining valid forward transactions, to alleviate the current pressure on the country’s exchange rate.
It is anticipated that this initiative by the CBN should provide a considerable boost to the Naira against other major world currencies and further increase investor confidence in the Nigerian economy.

The International Air Transport Association (IATA) had pegged the total trapped funds of foreign airlines in the country at $800 million. It threatened that some foreign airlines may be forced to quit the Nigerian market if nothing is done about their monies, which are mainly from ticket revenue.

The Association said that the Nigerian government is currently holding the highest amount of airline-trapped funds globally.

The airlines with trapped funds are Emirates Airline, Lufthansa, British Airways, Ethiopian Airlines, Qatar Airways and Air France among others.

IATA’s regional vice president for Africa and Middle East, Kamil Al Awadhi, had in August last year said he got the commitment of the federal government to clear the balance overtime.