The Central Bank of Nigeria (CBN), under the Federal Government’s directive, has started settling its pending matured FX forwards, with an estimated total of $6.7 billion owed to various creditors, according to information gathered by The PUNCH.
While the exact banks that received payments remain unverified, reports suggest that Citi Bank, Stanbic IBTC, and Standard Chartered Bank have been settled in full. However, the exact amounts disbursed to each institution are yet to be disclosed publicly.
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Following the clearance news, the naira surged in value, trading at N1,120 against the dollar on Thursday, marking an appreciation of 4.27% from its N1,170 rate the previous day. In various locations in Lagos, the naira reached rates as high as 1,040/$ and as low as 1,125/$. Conversely, in Abuja, the naira traded at an average of 1,200/$.InformationGuideNigeria
Bureaux De Change operators reported the naira’s commendable performance, noting its rapid rebound from N1,170/dollar during early trading to its closing rate of N1,120/dollar.
Despite the positive turnaround, The PUNCH highlighted that there are 21 active commercial institutions in Nigeria. Statements from two of the said banks, Stanbic IBTC and Citi, have acknowledged the CBN’s move to clear the FX forwards.
The circular titled ‘Settlement of Matured FX Forwards by CBN’, said, “We have been directed to inform you that the CBN has delivered all outstanding matured forward forex.
“We thank you for your patience and cooperation and value you for your business and partnership. Please speak with your Relationship Manager or your Trade Service Professional for clarification and additional details.JAMB Result
“It is a gradual payment that was done secretly, CBN didn’t make a fuss about it. It started yesterday and continued all through the night.”JAMB Portal
The source added that paid banks represent a small percentage of outstanding FX forwards with the largest percentage mostly in tier 1 banks yet to be settled.
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Live, Study and Work in Canada. No Payment is Required! Hurry Now click here to Apply >> Immigrate to CanadaHe, however, expressed hope that they will be settled in the next tranche maybe with a lower percentage.NYSC Portal
The CEO of a Tier 2 bank who does not want his name mentioned, also confirmed that his bank received $100m from the CBN, expressing confidence that the outstanding would soon be settled.
He said, “As I speak with you, our bank has been credited with $100m by the Central Bank and we are confident of getting the balance soonest. This is a positive development for the economy and trade in particular.”
However, there are commercial banks in the system that are not happy with the CBN because they have yet to receive any credit alert.
Sources at the CBN who spoke to The PUNCH unofficially said, “The banks who have not received payments are grumbling, alleging that the Apex bank has denied them of their rights.”
Reacting, the Association of Corporate Treasurers of Nigeria said the decision to settle matured foreign exchange forwards is a significant step in promoting stability and confidence in Nigeria’s foreign exchange market.
The association comprising all corporate treasurers in Nigeria in a statement obtained by our correspondent said the action demonstrates the apex bank’s commitment to ensuring the ease of doing business and reducing uncertainty in the market.
The statement signed by the association president, Adeyinka Ogunnubi, read, “We, at ACTN, believe that the timely settlement of matured FX forwards is crucial for our members and the broader business community. It allows our corporate treasurers to efficiently manage their foreign exchange risks and plan for their financial obligations.
“We recognize the CBN’s responsiveness to the concerns of businesses and its continued efforts to implement policies that enhance the resilience of the Nigerian financial system.
“As an association dedicated to advancing best practices in corporate treasury management, ACTN will continue to work closely with regulatory authorities to support policies that foster transparency, predictability, and stability in Nigeria’s financial markets.”
Also reacting, the Director General of the Nigeria Employers Consultative Association, Mr Wale Oyerinde, said, the actions of the new administration of the Central Bank of Nigeria have shown tremendous improvement in the FX management.
He said, “Well, there is no doubt that the economy lacked the requisite FOREX to completely close down the outstanding matured FX in banks. However, the actions of the new administration through the CBN have shown tremendous improvement in FX management, which was a huge challenge in the last administration.
“The current CBN management has stepped up forex intervention in the FOREX market, which is now accounting for 75 per cent delivery of the matured FX. While we commend this action and the determination to clear all the standings, we hope that this effort will be sustained. The sustainability of this intervention will largely depend on the guarantee of FOREX inflow from all available sources. With stable, focused and growth-induced reforms, another opportunity for FOREX like increased FDI will be enhanced,” Oyerinde added.
Also speaking, the immediate Vice President of the Manufacturers Association of Nigeria, Lagos Zone, Mr John Aluya, said he is yet to be informed of any of their members whose backlogs have been cleared.
Aluya, who is also a current member of the National Council of MAN, noted that if the initiative is properly implemented, it will help to improve the system. But he said that commercial banks may likely frustrate the move by the apex bank.
“But if this move is well implemented, it could be an initiative that could be done in such a way that it will be an improvement in the system. But I will tell you that for every step the CBN takes the big elephants in the house are always there to truncate it and if the CBN is not careful the big elephants will also truncate this move that they are about to make. The big elephants I mean are the commercial banks. They are the people who have always made our exchange rate unreliable because they benefit from it. When you talk of the I&E window you bid for it but manufacturers do not enjoy the window, because the banks will tell you that you will bid for I&E at CBN rate, and they will give you another account to pay the difference into and that is truncating the system.”
The Chairman of the Nigerian Economic Summit Group, Mr. Niyi Yusuf, said, “This is in the news and it’s useful that the administration is delivering on its public commitments which should help to improve public confidence. It’s a good signal and a right step to rebuilding trust and confidence,” he concluded.
