Naira Gains 10% To N1,382/$ After CBN Clears Forex Backlog

Following the clearing of all valid foreign exchange backlogs by the Central Bank of Nigeria (CBN) on Wednesday, and increased inflow at the Nigeria Autonomous Foreign Exchange Market (NAFEM), the value of the naira gained significantly on Thursday with the value rising from N1,536.83 which it closed on Wednesday to N1,382.85 to the dollar.

This is a 10 per cent improvement over the value of the local currency the previous day. Foreign exchange inflow at the market had also risen to $288.47 million.

The CBN had on Wednesday night said it had cleared the backlog of $7 billion in claims, according to Acting Director, Corporate Communications, Mrs. Hakama Sidi Ali.

Staying that the CBN recently concluded the payment of $1.5 billion to settle obligations to bank customers, effectively settling the residual balance of the FX backlog, she disclosed that independent auditors from Deloitte Consulting meticulously assessed these transactions, ensuring that only legitimate claims were honoured. Any invalid transactions were promptly referred to the relevant authorities for further scrutiny.

At a recent meeting, governor Cardoso declared: “We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy.

“It was important that we go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us,” he added.

Cardoso emphasised the priority of clearing the FX backlog to enhance credibility and confidence in the Nigerian economy.

The strain on the naira/dollar exchange rate is gradually diminishing, with Nigeria’s external reserves showing sustained growth over the past month.

According to data from the CBN, foreign currency reserves rose by 3.62 percent to $34.37 billion as of March 12, 2024, compared to $33.17 billion recorded at the beginning of February 2024.

Additionally, the CBN reported a significant surge in Diaspora remittances, which skyrocketed by 433 percent to $1.3 billion in February, compared to $300 million in January.