CBN Concludes Audit of Failed FX Deals, Refunds Banks in Naira Amid Ongoing FX Market Reforms
The Central Bank of Nigeria (CBN) has officially concluded its forensic audit into undelivered and unverified forward foreign exchange (FX) transactions, announcing that the value of all such failed deals has been refunded to banks in naira. The announcement was made through a letter dated August 4, 2025, signed by Okey Umeano, Acting Director of the Financial Markets Department, and sent to all authorised dealer banks. According to the circular, all validated FX forward contracts have been settled, while unfulfilled and unverifiable transactions were reimbursed in local currency.
The move brings closure to a longstanding concern in Nigeria’s foreign exchange market, which had been plagued by a backlog of unmet FX obligations. The CBN stated that the issue of undelivered forward deals is now “considered concluded and closed,” following the refunds. The bank also expressed appreciation for the cooperation of financial stakeholders throughout the audit process, which aimed to restore transparency and order in FX dealings.
The development follows pressure from key industry players such as the Manufacturers Association of Nigeria (MAN), which had earlier raised alarms over what it called the “unjust treatment” of manufacturers by some commercial banks. MAN had called on the CBN to step in and unfreeze the accounts of manufacturers whose funds were trapped due to failed FX forward transactions. The association’s intervention helped bring urgency to the audit process and pushed for a fair resolution.
The CBN’s refund—delivered in naira instead of U.S. dollars—signals a cautious approach to managing Nigeria’s limited external reserves. This approach aligns with broader efforts by the Cardoso-led CBN to clear FX backlogs for various sectors, including airlines and foreign investors, in a bid to stabilise the market and restore investor confidence. The refund marks a continuation of FX reform strategies first announced earlier in 2024.
Notably, in March 2024, the CBN declared that all valid FX backlogs had been cleared. This followed the February disclosure by CBN Governor Olayemi Cardoso that about $2.4 billion out of a reported $7 billion FX backlog was found to be invalid after a forensic audit conducted by Deloitte Management Consultants. Deloitte’s involvement was critical in scrutinising the legitimacy of claims, helping to eliminate fraudulent or questionable transactions, and reinforcing regulatory accountability in the FX market.