The Central Bank of Nigeria (CBN) has resolved to clear the backlog of forex demands of about 5 billion dollars in the country through spot and forward settlements.

According to a statement released by the Acting Director, Corporate Communications of the Central Bank, Mr Isaac Okoroafor, the move is to engender confidence, ensure credible price formation and sustain the integrity of the Nigerian inter-bank FX market.

This comes as the new flexible forex trading begins on Monday.

The Central Bank of Nigeria (CBN) had released the highlights of the much awaited flexible foreign exchange market policy on Wednesday, June 15, weeks after the Monetary Policy Committee announced the introduction of the policy.

After its meeting of May 24, the CBN said the policy would allow the bank retain a small portion of foreign exchange for critical transactions.

Key notes released stated that the market would operate as a single market structure via the interbank market and authorised dealers and that it would be purely an exchange rate market managed via Thompson Reuters platform.

Part of the key notes is that the CBN would participate via periodic intervention and would introduce primary dealers that deal with the CBN on a two way quote basis.

The primary dealers are also expected to deal with other players in the interbank market.

•Photo shows CBN Headquarters.