The Central Bank of Nigeria has taken a significant step to address the accumulated foreign exchange obligations owed to international airlines. Amidst ongoing efforts to address foreign exchange obligations, the Central Bank of Nigeria has paid in total of $61 million to international airlines through various Deposit Money Banks (DMBs). This move is aimed at settling the accumulated foreign exchange obligations and could have a significant impact on the financial landscape.
In a statement released by the Acting Director of Corporate Communications, Mrs Hakama Sidi-Ali, in Abuja on Sunday, it was affirmed that the disbursement is by the commitment of the Central Bank of Nigeria to eliminate the backlog of pending matured foreign exchange in Deposit Money Banks (DMBs).
Sidi-Ali stated that the aforementioned endeavour forms a component of the Central Bank of Nigeria’s endeavours to diminish its outstanding obligations to the aviation industry.
She mentioned that within the last three months, the CBN had also settled nearly two billion dollars in lingering forward liabilities.
She said that in the past three months, the CBN had also redeemed outstanding forward liabilities of close to two billion dollars.
“This underscores the CBN’s commitment to the resolution of pending obligations and a functional foreign exchange market.
“These payments signify CBN’s ongoing efforts to settle all remaining valid forward transactions, to alleviate the current pressure on the country’s exchange rate.
“It is anticipated that this initiative would provide a considerable boost to the Naira against other major world currencies and further increase investor confidence in the Nigerian economy,” she said.
The News Agency of Nigeria (NAN) reports that foreign airlines are currently trapped with an estimated 800 million dollars in the country.
In response, the International Air Transport Association (IATA) has warned that some foreign airlines may consider exiting the Nigerian market if the issue of trapped funds, predominantly from ticket revenue, is not addressed promptly.
The Association pointed out that the Nigerian government currently holds the highest amount of airline-trapped funds globally
Conclusion
In conclusion, this proactive measure, along with the commitment to eliminate outstanding obligations to the aviation industry, reflects the Central Bank’s dedication to promoting a functional foreign exchange market and alleviating pressure on the country’s exchange rate.
This initiative is anticipated to boost the Naira against major world currencies and enhance investor confidence in the Nigerian economy.
It is a positive development that could help mitigate the risks of foreign airlines considering exiting the Nigerian market due to trapped funds, as highlighted by the International Air Transport Association.
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