Economy

February 27, 2024

CBN has cleared another $400 million of valid FX backlog  — Cardoso

CBN has cleared another $400 million of valid FX backlog  — Cardoso

CBN Governor, Yemi Cardoso

The Governor of the Central Bank of Nigeria, CBN, Yemi Cardoso, said the apex bank has paid another $400 million of valid FX backlog to those who were genuinely identified. 

 

Cardoso stated this while presenting the communiqué at the Monetary Policy Committee meeting in Abuja on Tuesday.

Meanwhile, the bank increased the interest rate from 18.75% to 22.75%, a 400 basis point increase.

 

According to Cardoso, the bank will work to restore the confidence of the public and remains committed to its FX backlog for businesses owed.  

He said, “In terms of the backlog, we are committed to clearing the backlog of identified and genuine requests that are pending.

“We are committed to doing that and I can tell you that just today, we paid out $0.4 billion to those that were identified, and we are committed to continuing doing so in one form or the other to those genuinely identified and proven cases.”

Recall that, the CBN governor, upon assumption of office, was faced with an FX backlog in the region of $7 billion. 

However, Cardoso, in an interview, said the legitimate FX obligation of the bank stood at over $4 billion, of which the bank had cleared around $2.3 billion with up to $2.2 billion remaining.  

Also, the governor stated that around $2.4 billion of FX claims were not valid after the bank instituted a forensic audit of the claims.  

The CBN, under the leadership of Cardoso, has introduced a series of reforms aimed at restoring confidence in the bank, stabilising the naira and controlling inflation.

Part of these reforms includes stopping intervention finance that the governor claimed gulped around N10 trillion in the last administration, introducing clear regulation for BDC, unifying the foreign exchange market, and floating the naira.  

The CBN reforms were intended to stabilise the forex market, but the move has been characterised by significant volatility since the beginning of 2024, with the naira exchanging for about N1800 to the USD at some point.