CBN approves special forex for airlines and other critical sectors

Airlines operating in the country may soon experi­ence some ease in car­rying out their opera­tions following Central Bank of Nigeria’s (CBN) approval of a Special Secondary Market In­tervention Retail Sales (SMIS).

This important one-off exercise is dedicated to the clearance of the backlog of matured Foreign Exchange obli­gations. Also to benefit from the intervention are raw materials and machineries for manu­facturing companies and agricultural chemi­cals.

A statement signed by the Deputy Director, Press and Public Affairs, James Odaudu, revealed that the resolution by the apex bank to inter­vene in the Inter-Bank Forex market through forward settlement is expected to engender market confidence, en­sure access to forex by the airlines to settle their obligations and sustain the integrity of the Nige­rian Inter-Bank Foreign Exchange market.

The statement reads in parts: “The import of this peculiar exercise is that the CBN will not apply the relevant provisions under clause 2.4.3 (i) of its Revised Guidelines for the Op­eration of the Nigerian Inter-Bank Foreign Ex­change Market which provides that all SMIS bids shall be submitted to the CBN through the FXPDs. Consequently, CBN shall receive bids from all the Authorized Dealers.

“The CBN will 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 1% of the overall available funds on offer at each SMIS session”.

According to the CBN, whereas the bids are on Spot Forex basis as the Authorized Deal­ers’ accounts with the CBN will be debited in full for the Naira equiv­alent of the USD bid amount, the CBN will settle the bids through forward settlements of two months. Custom­ers that are not willing to accept the settlement terms have been advised not to participate in this Special SMIS - Retail.

Reacting to the de­velopment, Minister of State for Aviation has described the spe­cial intervention by the Central Bank as a great relief for airline opera­tors in the country who have complained bitterly over their inability to ac­cess the required foreign exchange to settle their backlog of obligations and which has adversely affected their opera­tions.