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Thursday, June 13, 2024

Naira’s fall: CBN moves against banks for hoarding $5billion

Yesterday, the Central Bank of Nigeria (CBN) directly addressed the issue at hand, accusing commercial banks of hoarding more than $5 billion in foreign currencies, surpassing the approved threshold.

The CBN attributed the current forex scarcity and the naira’s decline against the dollar to the actions of Deposit Money Banks (DMBs).

This accusation followed the apex bank’s expressed concern just a day prior, highlighting the banks’ excessive forex exposure.

The market’s closing rates revealed a notable improvement for the naira, exchanging at N1,450/$ in the parallel market, marking a gain of N70 compared to the previous day’s N1,520/$ closing rate.The CBN has set a deadline for erring banks to address the issue.

The directive mandates these banks to release any excess foreign currency to individuals and businesses in need by today’s deadline. Non-compliance with this directive will result in sanctions according to existing rules and regulations.

Underlining its commitment, the CBN has deployed teams of examiners to closely monitor compliance with the directive across all commercial banks heavily involved in foreign exchange transactions.

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