The Central Bank of Nigeria (CBN) has cleared $3.82 billion in foreign exchange backlogs and disbursed $500 million to several sectors.

This action comes after a $2 billion payment was made to clear oustanding backlogs in the petroleum, aviation and manufacturing sectors.

Through a number of institutions, the CBN has also paid $61.64 million to international airlines.

Starting in November 2023, foreign exchange forward contracts were cleared, and banks received payments ranging from a few hundred million to $1 billion.

The naira decline against US dollars has continued.

On the black market, or parallel market, the value of the naira has dropped as low as N1,445 to the US dollar, while on the official market, its presently worth N1,421.

This implies that when importers pass on the increase in costs, people will continue to notice price increases for imported products like electronics, petrol and food.

Budgets for households may be strained as a result, particularly for those with modest incomes.

Their living standards deteriorate as a result of their ability to purchase less with same amount of money as their pocketbook’s value drops.

Multinational corporations have left Nigeria as a result of the country’s tremendous economic hardship, including behemoth Procter and Gamble Co., and pharmaceutical giant GSK Plc.

While clearing the backlog has made it more difficult for the Central Bank of Nigeria (CBN) to intervene directly in the official market, it is important to note that once the backlog is cleared, things will normalize and oil production will be curbed.

CBN spokesperson, Sidi Ali, stated that the bank has started implementing a comprehensive strategy to improve liquidity in foreign exchange markets in the short term, medium and long term.

Importers are facing increasing challenges in bringing in essential goods, which has raised concerns about the impact on both businesses and the broader economy.

https://samsunblog.com/2024/01/30/nigeria-naira-remains-weak-despite-cbn-clearing-of-3-82bn-forex-backlog/