CBN warns Forex dealers against deliberate attempts to create price distortions

The Central Bank of Nigeria, CBN, has accused Authorised Dealers in the foreign exchange market of reporting inaccurate and misleading information on transactions.

The apex bank warned that such dealers and their customers should desist from such reportage.

This was disclosed by the acting director, financial markets department at the CBN, Aliyu Ashiru, in a circular issued to all the market dealers on Wednesday.

The CBN said that recent investigation has revealed instances of underreporting of transaction rates and the practice of ‘second cheques’ on foreign exchange and fixed-income transactions.

Read Also: Naira hits historic low, tumbles massively against US dollar at forex market

The CBN had permitted financial markets transactions to be conducted on a ‘willing buyer willing seller’ basis, by which prices are expected to be quoted and displayed transparently.

The bank accused the many of the dealers of flouting the order with their reportage, thereby causing distortions in the market.

The apex bank described some of the reports as inaccurate and misleading information.

“This behaviour is not compliant with the ethical standards associated with a sound financial market, and deliberate attempts to create price distortions by reporting false transaction details amounts to market manipulation which will not be tolerated and will henceforth face sanctions,” he said.

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