Adebayo Adenrele
The Central Bank of Nigeria (CBN) has ordered all Commercial Banks in the country to sell excess of dollars in 24 hours.
The Apex Bank gave the order in a new circular, which harps on reporting foreign currency exposure to all banks in curbing forex speculation & risk mitigation.
In several guidelines, the central bank seeks to address suspected cases of excessive foreign currency speculation while highlighting its concerns over the growing trend of banks holding large foreign currency positions.
The circular reads, “The CBN has noted with concern the growth in foreign currency exposures of banks through their Net Open Position (NOP).
“This has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange & other risks.”
The circular told the banks that the NOP limit of the overall foreign currency assets & liabilities, taking into cognizance both those on & off-balance sheet, should not exceed 20% short or 0% long of shareholders’ funds unimpaired by losses using the gross aggregate method.
