CBN tackles dealers on inaccurate, misleading FX rates

The Central Bank of Nigeria (CBN), on Monday warned all authorised foreign exchange dealers to desist from reporting inaccurate and misleading information on transactions concluded in the financial market.

Naira of lately has witnessed speculative trading at the foreign exchange market, leading to its free fall to N1,348.63 against the dollar as of January 29, 2024 at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

In a circular to all the market dealers, the central bank said ongoing investigations have revealed instances of underreporting of transaction rates and the practice of ‘second cheques’ on foreign exchange and fixed-income transactions.

The CBN had permitted financial markets transactions to be conducted on a ‘willing buyer willing seller’ basis, by which prices are expected to be quoted and displayed transparently. Many of the players in the market are reported to be flouting the order, thereby causing distortions in the market.

“The attention of the CBN has been drawn to the practice of Authorised Dealers (and their customers) in reporting inaccurate and misleading information on transactions concluded in the financial market.

“This behaviour is not compliant with the ethical standards associated with a sound financial market, and deliberate attempts to create price distortions by reporting false transaction details amounts to market manipulation which will not be tolerated and will henceforth face sanctions,” acting director, financial markets department at the CBN, Aliyu Ashiru, said in a circular issued to all the market dealers.