BusinessBanking/FinanceCBN Reneges On Payment Of $10bn Forex Backlog To Money Banks

CBN Reneges On Payment Of $10bn Forex Backlog To Money Banks

spot_img

Three weeks after the CBN promised to clear the $10 billion forex backlog due to commercial banks, the apex bank has yet to do so, according to a report by The Punch.

Access Bank Advert

On September 6, the immediate past acting CBN Governor, Folashodun Shonubi, said the apex bank had concluded negotiation on dollar debts with commercial banks, disclosing that all forex exchange backlogs would be cleared within one to two weeks.

According to him, deposit money banks have assisted the apex bank to clear the majority of its overdue FX forward contracts at maturity

UBA

As such, he said the CBN had reached an agreement to reimburse the lenders within one or two weeks following extensive debt restructuring talks that lasted over a long period of time.

READ ALSO:  PDP Suspends NEC Meeting For Akwa Ibom First Lady's Burial

“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,” Shonubi had told audience at a forum in Lagos

However, multiple top bank executives told The PUNCH on Sunday that almost three weeks after the promise, the apex bank had yet to make good its promise.

READ ALSO:  Atiku Accuses National Assembly Of Aiding President Tinubu's Lust For Loans

They said the development had put banks in a very tight FX liquidity position, a situation that has made many lenders to temporarily suspend several FX transactions including school fees and Personal Travel Allowance applications.

Findings show the situation has also worsened dollar liquidity at the parallel market as bank customers shift to the black market to meet their forex needs.

“The FX backlogs have not cleared. The promise has not been made good. We are hoping that the new CBN governor will begin a discussion with banks on it or clear them immediately,” the executive director of a commercial bank told one of correspondents on condition of anonymity.

READ ALSO:  Ikechebelu Is Back As Acting VC Nnamdi Azikiwe University

Also, a top official of Tier-2 bank privy to the development, said, “We have yet to see the FX backlogs cleared including the overdue forward contract obligations. We don’t know when this will be cleared. Unfortunately, the situation has worsened our FX position, making many banks to put some FX demands of their customers on hold.”

A report by JPMorgan, a United States-based lender put the total amount of forward contract debt owed by the CBN at $6.84bn. The CBN has however dismissed the report.


Discover more from The Source

Subscribe to get the latest posts sent to your email.

Share your story or advertise with us: WhatsApp: +2348174884527, Email: [email protected]

Your Comment Here

More articles

Discover more from The Source

Subscribe now to keep reading and get access to the full archive.

Continue reading