CBN to Sanction 5 Banks for Manipulating Exchange Rate

CBN to Sanction 5 Banks for Manipulating Exchange Rate

The Central Bank of Nigeria (CBN) on Sunday said it has queried some commercial banks in the country for manipulating the exchange rate.

According to The Nation, industry sources revealed that 5 banks were queried by the CBN.

The manipulation of the foreign exchange transaction rates was said to have been discovered following the mandatory rendition of forex returns and compliance with anti-money laundering regulations.

Some of the banks were said to have attributed the exchange rate discrepancies to ‘formatting errors’ in a bid to avoid being sanctioned by the apex bank. A flexible forex policy introduced by the CBN in 2016 is said to have given the banks room to engage in round-tripping allocated forex.

The partial devaluation of the Naira by about 40 percent reportedly created a huge gap between official and parallel market rates. Some banks were therefore allegedly diverting forex received from the CBN to the parallel market in order to make more profit.

Meanwhile, the CBN has denied allocating forex to different stakeholders at rates subject to the whim of the apex bank’s leadership.

“As the constitutionally authorised industry regulator mandated to manage the forex market, maintain external reserves and to safeguard the international value of the legal tender currency, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the forex market,” it said.

The CBN added that the forex sale under the new policy was most transparent and not intended to benefit any individual or corporate body in anyway.