The Nigerian naira has appreciated significantly against the US Dollar at both Parallel and Official market
This is as the Central Bank of Nigeria (CBN), on Wednesday, announced that all valid Foreign Exchange (FX) backlogs owed various sectors of the economy had been cleared.
The FX settlement fulfilled a key pledge of the CBN governor, Mr. Olayemi Cardoso, to process an inherited backlog of $7 billion in outstanding liabilities.
That was as the naira, on Wednesday, continued to appreciate both at the official and parallel markets, posting significant one-day gains.
The local currency appreciated to N1, 490/$1 at the parallel market, compared to N1, 590 recorded on Tuesday, indicating a N100 gain in one day.
Similarly, at the official Nigerian Autonomous Foreign Exchange Market (NAFEM) the naira closed on Wednesday at N1, 492.61 to the dollar, representing a N67.96 gain compared to N1, 560.57 on Tuesday.
This is the first time the Naira has reached below N1,500 against USD since last month.
The appreciation comes as USD transactions turnover surged to $268.29 million on Wednesday from $195.13 million on Tuesday.
CBN acting Director, Corporate Communications, Mrs. Hakama Sidi Ali, disclosed that the bank had defrayed all FX indebtedness, in a statement.
Ali said the apex bank recently concluded the payment of $1.5 billion to settle obligations to bank customers, effectively offsetting the residual balance of the FX backlog.
She disclosed that independent auditors from Deloitte Consulting meticulously assessed these transactions to ensure that only legitimate claims were honoured.
Ali added that any invalid transactions were promptly referred to the relevant authorities for further scrutiny.
Cardoso had recently reassured investors, “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.”
The central bank also reinforced its determination to push through ongoing plans to recapitalise Nigerian banks, and said the last exercise was conducted in 2005.
