In his reaction to the development, Minister of State for Aviation, Mr. Hadi Sirika said the special intervention by the CBN was a great relief for airline operators in the country who have complained about their inability to access the required Foreign Exchange to settle their backlog of obligations, which had affected their operations.
The Central Bank of Nigeria (CBN) has approved the Special Secondary Market Intervention Retail Sales (SMIS) for airlines operating in the country, which will help to clear the backlog of matured foreign exchange obligations.
Other areas it will cover are the raw materials and machineries for manufacturing companies and agricultural chemicals.
With this development, 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 2 months.
Customers that are not willing to accept the settlement terms have been advised not to participate in the Special SMIS – Retail.
This 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 Minister also stated that the apex bank had taken the right decision that would not only strengthen existing airlines, but also inspire confidence in aspiring operators in Nigeria’s aviation industry.
Senator Sirika at a recent meeting with members of the Airline Operators of Nigeria, promised to take up the issues with the authorities of the Bank after the operators complained of a lack of access to forex.