The Central Bank of Nigeria (CBN) has issued a warning to Authorized Dealers in the foreign exchange market, accusing them of providing inaccurate and misleading information on transactions.
In a circular released on Wednesday, Aliyu Ashiru, the acting director of the financial markets department at the CBN, highlighted instances of underreporting of transaction rates and the practice of ‘second cheques’ in foreign exchange and fixed-income transactions.
The CBN emphasised that financial market transactions should be conducted on a ‘willing buyer willing seller’ basis, with transparently quoted and displayed prices.
However, recent investigations revealed that many dealers were flouting this order, leading to distortions in the market.
The apex bank expressed dissatisfaction with the inaccurate and misleading information provided by some dealers, describing it as non-compliant with the ethical standards associated with a sound financial market.
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CBN cautioned against deliberate attempts to create price distortions through false transaction details, stating that such market manipulation would not be tolerated and would face sanctions.
In a circular Ashiru stated, “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.”