Nigeria: CBN to Settle Outstanding Dollar Debts with Banks, Naira May See Uptick

The Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, has announced that the apex bank will be clearing all outstanding forward contract debts owed to banks within the next one to two weeks.

While the precise total of these outstanding dollar debts was not disclosed by Shonubi, a recent report by JPMorgan, a U.S.-based bank, estimated the CBN’s forward contract debt at $6.84 billion.

Shonubi dismissed the JPMorgan report, emphasizing that the CBN had been in discussions with banks for some time regarding these forward contract debts and that they would be settled within the specified timeframe.

Addressing the issue, Shonubi stated, “There is no outstanding $7 billion as claimed by JP Morgan. It was just their opinion that was put on paper, and many people jumped on it. 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.”

Furthermore, Shonubi revealed that the CBN is actively investigating a Bureau De Change operator known as Crown Agent for the illegal importation and sale of foreign exchange to Nigerians. He assured that the CBN would take action against all BDC operators found in violation of regulations.

He explained, “For the last few weeks, we have been investigating, and quite a few players have been bringing in money and selling at less than the official rate. One of those we have investigated recently is Crown Agent. We have reason to believe that, we have been working with international agencies on this. We are looking at those who do not follow through the normal system, send it through them, and sell it to Nigerian companies. They can expect to hear from us shortly. And they will not be the only ones.”

Shonubi emphasized that the CBN remains committed to stabilizing the forex rate and continues to intervene in the market, even though its contributions represent less than 25% of market volume. He noted that this intervention aims to ensure rate stability and effectively manage foreign exchange flow to maintain a balanced supply to the financial sector.