CBN orders banks to sell excess dollars in 24 hours

Amid its fresh moves to stabilise the nation’s volatile exchange rate, the Central Bank of Nigeria has ordered Deposit Money Banks to sell their excess dollar stock latest February 1, 2024.

The CBN, which made the disclosure in a new circular released on Wednesday, also warned lenders against hoarding excess foreign currencies for profit.

According to officials, the central bank believes some commercial banks hold long-term foreign exchange positions to enable them profit from the volatile movements of exchange rates.

The new circular introduces a set of guidelines aimed at reducing the risks associated with these practices.

In the circular titled, “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks”, the CBN raised concerns over the growing trend of banks holding large foreign currency positions.

The latest circular came barely 48 hours after the CBN released a circular, warning banks and FX dealers against reporting false exchange rates, among others.

The new development also came on the heels of the adjustment of the methodology used for the calculation of the nation’s official exchange rate by the FMDQ Exchange.