The Fed Experiences Forex Crisis After a Hit on Funds Worth $567M

United States – The Federal Government meets with foreign airlines in Nigeria to discuss the trapped funds amounting to $567 million, which belonged to international carriers.

The Federal Government of the Fed is set to meet overseas airlines in Nigeria regarding issues neighboring the trapped funds, which belonged to the global carriers. The trapped funds increased by more than $567 million.

On Thursday, November 3, Emirates Airlines from Dubai declared the suspension of flight procedures in Nigeria because of the blocked funds. Operators mentioned that they halted the operations of other foreign airlines as well.

International Air transport Association gave data on Sunday, November 6, which showed that the highest blocked funds amounted to $567 million as of September 2022 and belonged to some carriers in Nigeria.

IATA stated that the blocked funds of the industry boosted by 27% in the previous six months, reaching a total of $1.851 billion. The total amount is bigger, and two factors can drive the increase. The first reason is the boost in sales in markets. The second reason is the worsening in Pakistan, Russia, Egypt, Ukraine, and Nigeria.

However, Nigeria’s Association of Foreign Airlines and Representative’s president, Kingsley Nwokeoma, said that the liabilities rose as per the record in September 2022. He said that the ticket sales also influenced the boost, and the Fed didn’t discuss with airlines to talk about clearing the debts.

Nwokeoma stated that the operations owe all international airlines. The debts piled up for how many years, and it didn’t only begin yesterday. He also said that if other countries performed as they did, there’d be no operations worldwide because money is crucial to pay aircraft manufacturers, maintenance, and workers.

On the other hand, foreign airlines will start receiving a batch of Forex settlements, which the CBN approved. Two weeks ago, CBN approved $120 million for international airlines. It came after the apex bank issued $265 million to start carriers repatriating the ticket sales profits. Sources close to the job stated that some airlines began receiving the settlements.

A source related to the situation stated that Emirates accepted the second settlement batch. However, it had to suspend flights going to Nigeria. The Fed and Emirates are discussing the reinstatement of services.

Aviation investors advised the Fed to search for an agreeable solution to the Forex crisis test facing international airlines. Nigeria has been grappling with a tough Forex crisis for many months, which caused the naira’s crash against the US dollar. The dollar resisted over the N800 mark in the past week, maintaining an upward movement over the naira.

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