By Elizabeth Adegbesan
The Central Bank of Nigeria, CBN, has directed banks to strictly comply with recent foreign exchange (FX) policy reforms.
CBN disclosed this today in a letter addressed to banking institutions and signed by the Acting Director, Banking Supervision, Dr. Adetona Adedeji.
Recall that the apex bank last year emphasized on the need for prudent financial management and risk mitigation thereby directing banks to exercise utmost prudence and set aside foreign currency revaluation gains as a counter-cyclical buffer to cushion any adverse movements in the foreign exchange rate.
CBN stated: “Further to our letter dated September 11, 2023, referenced BSD/DIR/CON/LAB/16/020 on the above subject, the Central Bank of Nigeria wishes to reiterate that banks are required to exercise utmost prudence and set aside Foreign Currency (FCY) revaluation gains as a counter-cyclical buffer to cushion any adverse movements in the FX rate.
“In this regard, banks shall not utilize such FX revaluation gains to pay dividends or meet operating expenses. “Please be guided accordingly.”
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