Bank Directors Association of Nigeria has given it’s nod to a directive by the Central Bank of Nigeria, CBN asking commercial banks to stop “hoarding’’ foreign currencies.
The CBN had last week expressed concerns over the escalating foreign currency exposure of banks through their Net Open Positions.
The apex bank issued a circular titled, ‘Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,’ directing lenders to sell all excess dollar stocks to their customers.
In the circular, the CBN stipulated that the NOP limit for overall foreign currency assets and liabilities should not exceed 20 per cent short or zero per cent long of shareholders’ funds.
Following the CBN directive, dollar supply rose by 180 per cent to $440m at the official foreign exchange market (NAFEM
Reacting, BDAN said, “This directive, along with other prudential requirements outlined in the circular, plays a critical role in ensuring the effective management of foreign currency exposures”.
According to the central bank circular, the CBN aims to mitigate potential losses that could pose significant systemic challenges.
These regulatory measures, it was said, “underscore a strategic initiative aimed at bolstering risk management, transparency, and accountability within the financial industry
