As the naira faces a sustained slide, currently exchanging around N1,500 to a dollar, the Central Bank of Nigeria (CBN) has issued a stern warning to authorised dealers, demanding transparency in transactions. This move is a response to growing concerns over market manipulations that could exacerbate the currency’s decline.
In a statement released in Abuja and signed by the Director of the Financial Market Department, Aliyu Ashiru, the apex bank highlighted its commitment to ensuring a fair and transparent financial market. The CBN emphasized that financial market transactions should be conducted on a ‘willing buyer and willing seller’ basis to foster transparency.
The bank’s investigations have uncovered cases of underreporting transaction rates and fixed-income transactions, raising alarms over potential distortions in the forex market. These practices, according to the CBN, amount to market manipulation, a serious infraction that the bank vows to address with stringent measures.
According to a report by The Guardian, the CBN has made it clear that it will not tolerate any form of market manipulation, warning of sanctions against those reporting false transaction details. This stance is part of the bank’s broader effort to stabilize the forex market and restore confidence in the Nigerian financial system.
In addition to the naira’s exchange rate against the dollar, the Pound Sterling and Euro have also reached new highs, trading at N1,855 and N1,585, respectively. These developments underscore the volatility in the forex market and the need for rigorous regulatory oversight.
Addressing another critical aspect of the forex market, the CBN has recently cleared all verified outstanding forex backlogs for foreign airlines. Acting Director of Corporate Communications, Hakama Sidi-Ali, announced that this payment brought the total sum disbursed to the sector to $136.73 million, effectively clearing all verified claims in the airline industry.
Sidi-Ali expressed the commitment of CBN Governor Olayemi Cardoso and his team to clearing the verified backlog of payments across all sectors. This action is part of the bank’s broader strategy to restore confidence in the Nigerian FX market and improve liquidity.
The CBN is also working closely with stakeholders to enhance liquidity in the forex market, which is expected to ease pressure on the naira. With the latest injection of over $64 million into the market, the bank remains optimistic about a positive response and urges market actors to avoid speculative actions that could harm the national currency.
Sidi-Ali called on the public to support the ongoing reforms in the forex market. The CBN is determined to promote orderliness and professional conduct among all participants, ensuring that market forces determine exchange rates. These measures are crucial for the stability of Nigeria’s financial market and the strength of the naira.
