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CBN Is trying Different Ways to Stabilise the FX Rate and Clear the Backlog

In the beginning of the week, a press conference in Lagos featured Mr Ade Shonubi, the acting governor of the Central Bank of Nigeria (CBN). In that conference, he said the CBN was partnering with local banks to clear out forex backlogs —estimated at $10 billion— in two weeks. According to Shonubi, banks have already catered to “a large amount” of foreign exchange demand. He also said local banks control three times (75%) more foreign currency transactions than the central bank. This statement seems consistent with the apex bank’s move to recede from being a regular player in the market to a regulatory background. He added that the bank’s involvement in the FX market was because of the restructuring with the banks and that the backlog would be cleared in “the next one or two weeks.”