CBN Cautions FX Dealers Against Market Manipulation As Naira Slides To N1,500

CBN Cautions FX Dealers Against Market Manipulation As Naira Slides To N1,500

Offsets ‘verified’ aviation FX backlog, pays $64.4m
Amid sustained slide of naira, which currently trades around N1,500 in exchange to a dollar, the Central Bank of Nigeria (CBN) has warned authorised dealers to ensure that transactions are conducted transparently.

The apex bank warned that any form of distortion leading to market manipulation will face sanctions.

In a statement issued in Abuja yesterday and signed by the Director, Financial Market Department, Aliyu Ashiru, the bank said investigations revealed cases of underreporting of transaction rates and fixed income transactions.

The apex bank said it allows financial market transactions to be conducted on a ‘willing-buyer and willing-seller’ basis that will ultimately engender transparency in the process.

“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,” it said.

The bank noted that it is not unaware of infractions carried out by authorised dealers, adding: “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 underreporting of transaction rates and practice of second cheques on foreign exchange and fixed income transactions

It maintained that it would deal ruthlessly with distortions and reporting of false transactions in the FX market.

“Deliberate attempts to create price distortion by reporting false transaction details amounts to market manipulation which will not be tolerated and henceforth face sanctions,” it added.

The Pound Sterling also exchanged for a new height of N1,855 yesterday while Euro went for 1,585.

Meanwhile, the regulator has offset all verified outstanding forex backlogs of foreign airlines.

Acting director of corporate communications of the apex bank, Hakama Sidi-Ali, stated this in Abuja yesterday.

Sidi-Ali said the latest amount paid to the airlines brought the total verified sum disbursed to the sector to $136.73 million, adding that all the verified airline claims have now been cleared.

She disclosed that the CBN Governor, Olayemi Cardoso, and his team are committed and would stop at nothing to ensure that the verified backlog of payments across all other sectors is cleared and confidence restored in the Nigerian FX market.

She also assured that the CBN is working with stakeholders to ensure liquidity improves within the FX market, thereby reducing pressure on the naira.

While expressing optimism that the market would respond positively with the latest injection of over $64 million, she admonished actors in the FX market to guard against speculation as such actions could hurt the naira.

Siri-Ali, therefore, urged the public to support the reforms in the FX market, saying the CBN would continue to promote orderliness and professional conduct by all participants to ensure market forces determine exchange rates.

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