Central Bank of Nigeria (CBN) has warned foreign exchange (FX) authorised dealers, and their customers, to stop presenting inaccurate and misleading information about their transactions.
A circular on Monsay signed by Aliyu Ashiru, CBN’s Acting Director of the Financial Markets Department, contained this warning
The country’s apex bank had in June 2023, announced the unification of all segments of the forex exchange (FX) market, re-introducing the “willing buyer, willing seller” model at the investors and exporters (I&E) window.
Operations in this window were to be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FM/DIR/CIR/GEN/08/007.
All eligible transactions are permitted to access foreign exchange at this window.
But investigations have revealed under-reporting of transaction rates and the nefarious practice of “second cheques” in foreign exchange and fixed-income deals.
Aliyu Ashiru warns that these activities will no longer be tolerated as those caught making deliberate attempts to create price distortions by reporting false transaction details will face sanctions.
“All Authorised Dealers are reminded that the Central Bank of Nigeria (CBN) has permitted financial markets transactions to be conducted on a ‘willing buyer willing seller’ basis, and therefore expects prices to be quoted and displayed in a transparent manner,” CBN said.
“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.
“Ongoing investigations have revealed instances of under-reporting of transaction rates and the practice of ‘second cheques” on foreign exchange and fixed income transactions.
“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”
(C) ControlTV 2024.
