To fulfill its commitment to eliminating the backlog of matured foreign exchange in Deposit Money Banks (DMBs), the Central Bank of Nigeria (CBN) has disbursed approximately $61.64 million to foreign airlines through various banks. This initiative is part of the CBN’s broader efforts to reduce its outstanding liability to airlines and clear the forex backlog held by commercial banks, thereby alleviating pressure on the foreign exchange market.
In November 2023, foreign airline operators revealed that around 90% of their $783 million trapped funds had not been paid and according to data from the International Air Transport Association, Nigeria accounted for a substantial $783 million of airlines’ blocked funds as of August 2023.
The Acting Director of the Corporate Communications Department at the CBN, Mrs. Hakama Sidi Ali, confirmed the recent payment and disclosed that the apex bank redeemed outstanding forward liabilities amounting to almost $2 billion over the past three months. This reflects the CBN’s dedication to resolving pending obligations and maintaining a functional foreign exchange market.
“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,” said Mrs. Hakama Sidi Ali.
The CBN’s proactive steps to clear the backlog and meet its financial obligations are anticipated to impact Naira’s standing against major world currencies positively. This move is expected to instill confidence among investors in the Nigerian economy, contributing to a more stable foreign exchange environment.