Amidst the persistent decline in the value of the naira, which presently stands at approximately N1,500 per dollar, the Central Bank of Nigeria (CBN) has cautioned authorized dealers to guarantee that transactions are carried out transparently.
The top bank issued a warning, threatening sanctions for any distortion that results in market manipulation.
The bank stated that its investigations had shown instances of underreporting transaction rates and fixed income transactions in a statement released in Abuja yesterday and signed by Aliyu Ashiru, Director, Financial Market Department.
According to the apex bank, it permits financial market transactions to take place between “willing-buyer and willing-seller,” which will eventually lead to more process transparency.
The statement read, “All authorized dealers are reminded that prices should be quoted and displayed transparently as the Central Bank of Nigeria (CBN) has authorized financial market transactions to be conducted on a ‘willing buyer, willing seller’ basis.”
The bank stated that it is aware of violations committed by authorized dealers, saying, “Authorized dealers’ (and their clients’) practice of submitting false and misleading information on transactions completed in the financial market has come to the CBN’s knowledge.”
Subsequent inquiries have shown cases of transaction rates being underreported and the usage of second checks for fixed-income and foreign exchange transactions.
It vowed to take harsh measures against any distortions and any reporting of fraudulent activities in the foreign exchange market.
“Intentional attempts to manipulate the market by disclosing fictitious transaction details will not be accepted and will result in consequences,” the statement continued.
Yesterday, the Euro traded for 1,585 and the Pound Sterling reached a new high of N1,855.
All confirmed outstanding FX backlogs of international airlines have been neutralized by the regulator in the interim.
Hakama Sidi-Ali, the apex bank’s acting director of corporate communications, made this announcement Wednesday in Abuja.
Sidi-Ali stated that all of the verified airline claims have now been resolved, bringing the total verified amount given to the industry to $136.73 million with the most recent payment made to the airlines.
She revealed that Olayemi Cardoso, the governor of the CBN, and his team are dedicated to clearing the verified backlog of payments in all other sectors and restoring trust in the Nigerian foreign exchange market, and they will do everything it takes to achieve this goal.
Additionally, she gave assurance that the CBN is collaborating with relevant parties to guarantee increased FX market liquidity, which will lessen pressure on the naira.
She cautioned participants in the FX market to avoid speculating as such activities could damage the naira, even as she expressed optimism that the market would react favorably to the most recent infusion of over $64 million.
In order to guarantee that market forces decide currency rates, Siri-Ali asked the public to support the FX market changes and stated that the CBN would continue to promote orderliness and professional conduct by all participants.
