It has been revealed that the Central Bank of Nigeria (CBN), has yet to clear over $10 billion foreign exchange debts owed Deposit Money Bank, over two weeks after the apex bank promised to do so.
This was even as the naira was sold at between 990/$ and 995/$ by Bureau De Change operators on Friday and Saturday in Lagos, Abuja and Kano.
However, on the Investor & Exporter forex window, the naira appreciated to 747.76/$ on Friday, from 772.98/$ on Thursday.
Immediate past acting CBN Governor, Folashodun Shonubi, said on September 6, 2023, that the apex bank had concluded negotiation on dollar debts with commercial banks, adding that all forex exchange backlogs would be cleared within two weeks.
Shonubi noted that, deposit money banks had assisted the apex bank to clear the majority of its overdue FX forward contracts at maturity, noting that the CBN had reached an agreement to reimburse the lenders within one or two weeks following extensive debt restructuring talks that lasted over a long period of time.
According to him, “In response to questions about the backlogs, the banks have been working with the CBN on various structures to clear them. So, what happens is that at maturity, they make the foreign exchange available to those that need it.
“We are discussing with them so we can structure their own. So, we are working towards clearing them in the next one or two weeks. It is something we have been discussing for a while.”
However, top bank executives said on Sunday that almost three weeks after the promise, the apex bank had yet to make good its promise.
They said the development had put banks in a very tight FX liquidity position, a situation that has made many lenders to temporarily suspend several FX transactions including school fees and Personal Travel Allowance applications.
Findings show the situation has also worsened dollar liquidity at the parallel market as bank customers shift to the black market to meet their forex needs.
“The FX backlogs have not cleared. The promise has not been made good. We are hoping that the new CBN governor will begin a discussion with banks on it or clear them immediately,” the executive director of a commercial bank said.
Also, a top official of Tier-2 bank privy to the development, said, “We have yet to see the FX backlogs cleared including the overdue forward contract obligations. We don’t know when this will be cleared. Unfortunately, the situation has worsened our FX position, making many banks to put some FX demands of their customers on hold.”
A report by JPMorgan, a United States-based lender put the total amount of forward contract debt owed by the CBN at $6.84 billion. The CBN has however dismissed the report.
Reports had put forward contracts and dollar swap deals between the apex bank and banks at over $10 billion.
At the parallel market, Pound Sterling was bought and sold for £1,235/ and £1,250/, while Euro was bought and sold for 1,025/€ and 1,028/€, according to operators in the segment of the market.
On the Investor & Exporter forex window, the naira however appreciated to 747.76/$ at the close of Friday, from 772.98/$ on Thursday.