Adedapo Adesanya
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has warned authorized dealers against sharp practices in the foreign exchange (FX) market, adding that if there is any form of price distortion leading to market manipulation, they will face sanctions.
The apex bank charged them to conduct their operations transparently, according to a statement by the Director of the Financial Market Department, Mr Aliyu M. Ashiru.
The CBN stated that investigations have revealed cases of underreporting of transaction rates and fixed income transactions.
The statement said the apex bank allows financial market transactions to be conducted on a “willing buyer, willing seller” basis.
“All Authorised dealers are reminded that the Central Bank of Nigeria (CBN) has permitted financial market transactions to be conducted on a ‘willing buyer, willing seller’ basis, and therefore expects prices to be quoted and displayed transparently.
“The attention of the CBN has been drawn to the practice of authorized dealers (and their customers) in reporting inaccurate and misleading information on transactions concluded in the financial market. Ongoing investigations have revealed instances of underreporting of transaction rates and practice of second cheques on foreign exchange and fixed income transactions,” it said.
The lender of last resort further warned that such practices run counter to the ethics of proper financial market and will not be tolerated going forward.
“Deliberate attempts to create price distortion by reporting false transaction details amounts to market manipulation which will not be tolerated and henceforth face sanctions,” the bank stated.
Recall that the CBN announced that it had cleared another tranche of $500 million of verified forex liabilities from its backlog estimated at $7 billion.
Despite this, there has been a fresh devaluation that has seen the Naira hit a fresh low of N1,348 per Dollar. The drop has brought the Naira rate at the official market near levels at other unregulated markets.
