More Good News for Naira as CBN Clears Forex Debt, Dealers React with New Exchange Rate

• The Central Bank of Nigeria (CBN) said it has finally cleared all the forex forward backlog owed
• The bank also stated that there is a significant increase in Nigeria's external reserves used to defend the naira
• The development has seen forex traders adjust their naira to dollar exchange rate expectation

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Central Bank of Nigeria (CBN)has revealed that it has fulfilled the promise to pay all valid foreign exchange forwards liability.

In a statement, the acting director of corporate communications, Sidi Ali, noted that the Oluyemi Cardoso-led CBN inherited a backlog of $7 billion in claims.

The statement noted that all claims have finally been cleared, easing pressure on the foreign exchange market.

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Naira to dollar exchange rate nears N1,300/$ as CBN clears FX backlog

The statement said:

"The Central Bank of Nigeria has announced that all valid foreign exchange backlogs have now been settled, fulfilling a key pledge of the CBN Governor, Mr Olayemi Cardoso, to process an inherited backlog of $7bn in claims.

“Clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee meeting to stabilise the exchange rate and thereby curb imported inflation, spurring confidence in the banking system and the economy.

Nigeria external reserves

The apex bank also revealed an increase in remittance payments from Nigerians abroad through the official window and heightened interest from foreign investors in local assets, including government debt securities, Punch reports.

The CBN has also announced a significant increase in external reserves, rising by $993 million to $34.11 billion as of March 7, 2024, the highest level in eight months.

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CBN slashes customs FX duty rate to clear goods as Naira gains against US dollar

Dealers' exchange rate target

The positive developments of increased liquidity have seen the naira improve in value against the US dollar.to below N1,500/$.

The Guardian reports that forex traders expect the dollar to hit N1200/$ in days even as N1,300/$ is in sight.

Two UK firms predict exciting exchange rate in 2024

Earlier, Legit.ng reported that two UK-based financial institutions have predicted a new exchange rate for the naira against the dollar

Goldman Sachs and Standard Chartered believe the naira will rebound and close stronger in 2024.

Their predictions are based on the current reforms by the Cardoso-led CBN, which has helped the naira achieve a N1572.86/$ rate on Monday from above N1,600.

Source: Legit.ng