CBN approves special forex sale for airlines, others

CBN approves special forex sale for airlines, others

The Central Bank of Nigeria (CBN) has approved a special secondary
market intervention retail sales of foreign exchange for airlines
operating in the country.
According to a statement from the aviation arm of the Federal Ministry
of Transportation on Friday, the arrangement is dedicated to the
clearance of the backlog of matured foreign exchange obligations.
Also to benefit from the intervention, according to the ministry, are
importers of raw materials and machineries for manufacturing
companies and agricultural chemicals.
It noted that the resolution by the apex bank to intervene in the
interbank forex market through forward settlement was expected to
engender market confidence, ensure access to forex by the airlines to
settle their obligations, and sustain the integrity of the Nigerian
interbank foreign exchange market.
The statement noted that the implication of the intervention was that
the CBN would not apply the Clause 2.4.3 (i) of the Revised Guidelines
for the Operation of the Nigerian Interbank Foreign Exchange Market,
which provides that “all SMIS bids shall be submitted to the CBN
through the FXPDs.”
The ministry stated that consequently, the CBN shall receive bids from
all the authorised dealers and would also not apply the relevant
provisions under clause 2.4.3 (i) of the guidelines, which provide that
“spot forex sold to any particular end-user shall not exceed one per
cent of the overall available funds on offer at each SMIS session.”
Reacting to the development, the Minister of State for Aviation, Senator
Hadi Sirika, described the special intervention by the central bank as a
great relief for airline operators who had complained bitterly over their
inability to access the required foreign exchange to settle their backlog
of obligations.
This, he said, had adversely affected their operations.
Sirika noted that he apex bank had taken the right decision that would
not only strengthen the existing airlines, but also inspire confidence in
aspiring operators in Nigeria’s aviation industry.
According to the minister, the development is coming after
intervention by the Federal Government through the Ministry of
Aviation on behalf of the foreign airlines and domestic operators under
the aegis of the Airlines Operators of Nigeria.
“This is after much intervention on behalf of the airlines, both foreign
and domestic. The central bank has yielded and we are happy because
this means a lot to us and the airlines. They have been going through a
lot and we are so happy that this will be a huge succour to their
operations,” he said.
He said airline operators in the country had been affected by their
inability to access forex to settle their backlog of obligations, adding
that their operations had been adversely affected in the process.
Describing the sector as critical to economic growth, Sirika said the
CBN had taken the right step to strengthen the airlines.
The CBN had said in a circular to the concerned sectors that the
intervention would further engender market confidence, ensure access
to forex by end users and sustain the integrity of the interbank forex
market.

 – Punch.