The settlement of foreign exchange forwards to banks has been initiated by the Central Bank of Nigeria (CBN). Yesterday, The Guardian gathered at the central bank to confirm that the CBN has begun balancing the outstanding foreign exchange forwards.
As of yesterday evening, the Naira strengthened to N786.02/$ at the official exchange rate and increased to N1012/$ on the parallel market.
A company wrote, “We have been directed to inform you that the CBN has delivered all outstanding matured forward forex,” in confirming the payment yesterday. We appreciate your business and partnership, and we thank you for your patience and cooperation.
“For further information and clarification, please contact your Trade Service Professional or Relationship Manager.”
It was discovered that foreign airlines are also thought to benefit, even if the source of the money used to offset the backlog is still unknown.
Chief Executive Officer of Dairy Hills Limited, Kelvin Emmanuel, responded to the situation by saying that banks can open letters of credit with clean lines to Nigerian corporates that rely on forwards to import goods because the CBN is moving to clear forex forwards, especially commercial letters of credit, to correspondent banks first and then Nigerian banks with a total of about $2.8 billion.
“The official I&E rates will close ranks and return to fair value,” he continued, referring to the supply from the gas forwards signed between the Ministry of Finance incorporated and international banks that are officially external asset managers to the CBN for financializing five years of dividends from NLNG, of which the NNPC holds 49 percent.
“This is necessary to ensure that consumer goods from durable goods import do not continue to inflate, especially going into the festive season, and to keep the price of PMS, diesel, and Jet A1 within reasonable limits.”
He anticipated that this move will bring the exchange rate within N800 levels in the upcoming week.
