This is as the apex bank also assured the public that it has enough volume of banknotes to go around even in the approaching festive period, calling off allegations of cash in the banking sector.

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The CBN claimed in reaction to reports of alleged scarcity of cash at banks, automated teller machines (ATMs), Points of Sale and Bureaux de Change (BDCs) in some major cities across the country.

The central bank in a statement said the seeming cash scarcity in some locations is due largely to high volume withdrawals from the CBN branches by Deposit Money Banks (DMBs) and panic withdrawals by customers from the ATMs.

There had been reported cases of panic withdrawals in parts of Nigeria over fears that the banknote could be scarce as was experienced in 2022 end of the year festivities, especially as the bank is yet to comment on continued use of the redesigned higher-denominations of the old currency notes.

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The court had extended the use of the old banknotes till December 2023 to allow a better circulation of the new notes. The CBN is here to make its position known on the issue.

“While we note the concerns of Nigerians on the availability of cash for financial transactions, we wish to assure the public that there is sufficient stock of currency notes for economic activities in the country. The branches of the CBN across the country are also working to ensure the seamless

circulation of cash in their respective states of operation.

“Members of the public are, therefore, advised to guard against panic withdrawals as there is sufficient stock to facilitate economic activities. Nigerians are also advised to embrace alternative modes of payment, which would reduce pressure on using physical cash,” CBN spokesman Isa AbdulMumin said in the statement.

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With an estimated backlog of over $10 billion, CBN said, it has started clearing outstanding foreign currency forwards owed to banks, with banking sources saying there was an initial payment of $1 billion.

A statement titled ‘Settlement of Matured FX forwards by CBN,’ by Citibank, the bank informed its customers that the CBN has cleared all outstanding matured forex.

The statement read, “Dear Valued Client, We have been directed to inform you that the CBN has delivered all outstanding matured forward forex. We thank you for your patience & cooperation, and value you for your business and partnership.

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“Please speak with your Relationship Manager or your Trade Service Professional for clarification and additional details,” Citi bank stated.

However, airlines have started seeing their backlogs being cleared.

Our correspondent gathered that Stanbic IBTC also alluded to the clearing of the forex backlogs.

“Yesterday, (Wednesday), the apex bank began clearing the backlog of outstanding Retail SMIS obligations. The total amount cleared is yet to be ascertained.”

“We have started receiving our trapped funds but it’s in tranches,” the source who is a staff of one of the airlines and who craved anonymity said.

Confirming the development, director, Corporate Communications of the CBN, Dr Isa Abdulmumin told Reuters on Thursday that ‘the CBN has started paying the foreign exchange backlogs to banks. So far, 14 banks have been paid.’

Reuters, quoting four banking sources, said, the banks were paid varying amounts totalling about $1 billion and that the payments would continue in the next few weeks. The CBN spokesperson had however not mentioned the amount or the name of the banks that were paid.

While a few of the lenders were paid the entire amount owed, others got as much as 80 per cent of the backlog, the sources said.

Nigeria has nearly $7 billion in forex forwards that have matured, which corporates bought from local banks. Banks then repaid foreign credit lines with their own funds when the central bank did not pay out.

The central bank’s payments follow Finance Minister Wale Edun’s announcement that Nigeria was expecting $10 billion of inflows to improve foreign exchange market liquidity. It will come as a relief to local lenders, who have been struggling to meet demands from customers due to chronic dollar shortages in the country.

Investment Research Associate at Comercio Partners, Ifeanyi Ubah, in an emailed note, said the settlement which started with international banks such as Citibank had commenced on Monday.

The investment firm noted that “while it remains uncertain whether the CBN will completely resolve all its matured foreign exchange forwards, the research team anticipates a positive market response until conflicting news emerges. Therefore, asset managers and traders should make prudent decisions regarding their portfolios.

“We anticipate a surge in market confidence, particularly in Nigeria’s securities like the Eurobond. This positive development might trigger an increase in investor interest in these assets, potentially resulting in a rally around the Eurobond.

“The news is expected to bolster confidence in the Naira, potentially leading to an appreciation of its value. While the official market saw bids as low as 700/$, settling at 789.75/$ with a turnover of $105 million, there’s an optimistic outlook for the black market, indicating a potentially significant gain for the Naira from its current position at 1160/$.”

LEADERSHIP reports that the development comes barely 24 hours after the chairman of Air Peace alleged that the Central Bank of Nigeria owes his firm $24 million, six months after lodgment amid the foreign exchange crisis.

Also, last week, the Minister of Finance, Wale Edun, disclosed last week that the country would soon receive an inflow of $10 billion in foreign currency to mitigate the forex crisis.

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