The Federal Government through the Central Bank of Nigeria, has commenced payment of outstanding matured FX forwards owed to various creditors.
A source familiar with the development confirmed the payment on Thursday.
Meanwhile, unconfirmed sources said three banks received full payment of debts owed.
The banks are Citi Bank, Stanbic IBTC and Standard Chartered Bank.
The amount of overdue forward payments is estimated at $6.7 billion, according to the Minister of Finance, Wale Edun.
Meanwhile, the naira has risen to N1,120 against the dollar as the foreign exchange market reacted to news that the Central Bank of Nigeria has begun to clear some of its FX backlog on Thursday.
This represents an appreciation of N50 or 4.27 per cent compared to the N1,170 it traded for on Wednesday. Currency traders, also known as Bureaux De Change operators, who spoke to The PUNCH stated the naira was recovering well after making a quick recovery from N1,170/dollar in the morning to close trading at N1,120/dollar.
The naira in Lagos recorded an average of 1,120/$ on Thursday, appreciating to 1,040/$ and 1,125/$ in different locations on Thursday. It traded at 1,170/$ on Wednesday. In Abuja, the average price of the naira against the dollar was 1,200.
However, 21 commercial institutions are operating in the country.
The source said, “Three banks payment received full payment from the CBN. On the amount, no bank would want to disclose that information.
Statements from two of the banks confirmed the payment of FX forwards by the CBN.
Stanbic IBTC in a statement said, “Yesterday, the apex bank began clearing the backlog of outstanding Retail SMIS obligations. The total amount cleared is yet to be ascertained.”
Also, Citi in a statement issued by its Treasury and Trade Solutions department, exclaimed, “CBN HAS DONE IT.”
The bank enjoined its customers to begin to speak with their respective Relationship Manager or Trade Service Professional for clarification on the matter.
The circular titled ‘Settlement of Matured FX Forwards by CBN’, said, “We have been directed to inform you that the CBN has delivered all outstanding matured forward forex.
“We thank you for your patience and cooperation and value you for your business and partnership. Please speak with your Relationship Manager or your Trade Service Professional for clarification and additional details.
“It is a gradual payment that was done secretly, CBN didn’t make a fuss about it. It started yesterday and continued all through the night.”
The source added that paid banks represent a small percentage of outstanding FX forwards with the largest percentage mostly in tier 1 banks yet to be settled.
He, however, expressed hope that they will be settled in the next tranche maybe with a lower percentage.
The CEO of a Tier 2 bank who does not want his name mentioned, also confirmed that his bank received $100m from the CBN, expressing confidence that the outstanding would soon be settled.
He said, “As I speak with you, our bank has been credited with $100m by the Central Bank and we are confident of getting the balance soonest. This is a positive development for the economy and trade in particular.”
However, there are commercial banks in the system that are not happy with the CBN because they have yet to receive any credit alert.
Sources at the CBN who spoke unofficially said, “The banks who have not received payments are grumbling, alleging that the Apex bank has denied them of their rights.”
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.