CBN settles $2bn of FX contracts

Nigeria’s central bank has reportedly settled around $2 billion of its outstanding foreign-exchange contracts that had matured. The payments, made over a period of three months, include the settlement of $61.64 million to address part of the outstanding liabilities owed to foreign airlines operating in the country. The central bank acknowledges the overdue payments, and government officials estimate the total overdue forward payments to be around $6.7 billion. However, some analysts suggest the figure may be higher, ranging between $7 billion and $10 billion, without specifying sources.

Among the outstanding amounts are at least $744 million owed to foreign airlines as of March the previous year, as reported by the International Air Transport Association. The failure to clear this backlog has contributed to the depreciation of the Naira, which has experienced a decline of over 50% in value since it was allowed to trade more freely against the dollar in June of the preceding year.

The recent payment of around $2 billion is seen as a sign of the central bank’s commitment to addressing overdue obligations, aiming to alleviate pressure on the Naira.