The Central Bank of Nigeria (CBN) has released US$500 million to various sectors in yet another effort to address the backlog of verified foreign exchange transactions. This action comes barely a week after the Bank paid approximately US $2 billion to settle outstanding commitments across manufacturing, aviation, and petroleum sectors.
Acting Director of the Corporate Communications Department at the CBN, Mrs. Hakama Sidi Ali who disclosed this in Abuja on Monday, Janaury 29, 2024, noted that the Management of the CBN was committed to settling all legitimate foreign exchange backlogs within a short time frame.
PricewaterhouseCoopers (PwC) in a document, “Nigeria Economic Outlook: Seven Trends that will Shape Nigerian Economy in 2024,” said that the value of the naira, has fallen by as much as 98 percent due to government’s decision to collapse the foreign exchange market into a single Investors and Exporters (I&E) window in 2023. The naira has performed poorly in the last six months, one of the worst performing currencies globally. Concerns heightened following the inability of institutions to meet demand thereby widening the exchange rate gap. Aminu Gwadabe, President of the Association of Bureaux de Change Operators of Nigeria (ABCON) expressed concern over the loss of confidence of citizens on the nation’s currency which is fueling speculations.
Reiterating the assurances of the Governor, Mr. Olayemi Cardoso, Sidi Ali said the CBN had begun implementing a comprehensive strategy to improve liquidity in the Nigerian foreign exchange markets in the short, medium, and long term.
“As the Governor said, the CBN’s focus is on addressing fundamental issues that have hindered the effective operation of the Nigerian FX markets over the years,” she added.
While noting that the forex market reforms were designed to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities, Sidi Ali 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, stressing that transparency in the market would enable the fair determination of exchange rates and, by extension, guarantee stability for businesses and individuals alike.
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