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.