CBN to Settle 60-day FX Forward, Guarantees LCs for Importers

Obinna Chima

In fulfilment of its pledge to fund forward sales under the flexible FX regime, the Central Bank of Nigeria (CBN) has disclosed plans to within the next few months, fund the 60-day forward sales and request from the agricultural, aviation, machinery and raw materials sectors, thus guaranteeing letters of credit (LCs) for importers to ship in required goods.

A four-paragraph statement from the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor confirmed that the CBN would fund the requests from the various sectors in the secondary market interbank thereby giving a boost to the importation of required goods for the overall development of the economy.

Okorafor explained that importers in the agricultural sector would be getting the largest percentage allocation of 62 percent of their requests, while importers of machinery would receive 53 per cent of their requests. Other sectors to receive allotments are the airlines, which will have 32 percent of their request settled, as well as the importers of raw materials.

According to him, the move by the CBN to settle the 60-day forward sales amounting to over $300 million would further ease pressure on the Naira and improve market liquidity.