In a recent circular, the Central Bank of Nigeria (CBN) has raised concerns about Authorised Dealers in the foreign exchange market providing inaccurate and misleading information on transactions. Acting director of the financial markets department at the CBN, Aliyu Ashiru, issued a stern warning to dealers and their customers, urging them to cease such reportage immediately.
The CBN’s investigation brought to light instances of underreporting of transaction rates and the use of ‘second cheques’ in foreign exchange and fixed-income transactions. Despite the CBN’s authorization for transactions on a ‘willing buyer willing seller’ basis, many dealers are accused of violating this directive, leading to distortions in the market.
The apex bank expressed its discontent with the inaccurate and misleading information circulating in reports, emphasizing that such behavior is inconsistent with the ethical standards expected in a robust financial market. The deliberate attempts to create price distortions through false transaction details are deemed as market manipulation, and the CBN has asserted that it will not tolerate such actions, promising sanctions for those involved.
This warning from the CBN underscores the importance of transparency and adherence to ethical standards in financial markets. Traders and dealers are now urged to uphold the principles of a sound financial market to prevent further disruptions and ensure a fair and reliable trading environment.
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