{"id":109176,"date":"2024-01-31T21:52:39","date_gmt":"2024-01-31T20:52:39","guid":{"rendered":"https:\/\/www.africa-press.net\/nigeria\/uncategorized\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding"},"modified":"2024-02-01T00:25:31","modified_gmt":"2024-01-31T23:25:31","slug":"forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding","title":{"rendered":"Forex Crisis: CBN issues fresh guidelines to banks against foreign currency speculation, hoarding"},"content":{"rendered":"

Africa-Press – Nigeria. <\/strong><\/span>Amid the free fall of the Naira in the foreign exchange market, the Central Bank of Nigeria has issued fresh guidelines to commercial banks against currency speculation and hoarding.<\/p>\n

CBN disclosed this on Wednesday in the circular titled, \u2018Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks, signed by Directors of Trade and Banking Supervision Hassan Mahmud and Rita Sike.<\/p>\n

According to CBN, some commercial banks hoard foreign currency to make a profit when there is a Naira depreciation in the forex market.<\/p>\n

However, the new guideline will help curb the Nigerian banking sector\u2019s foreign currency hoarding and speculation.<\/p>\n

It noted the guideline is necessary concerning the growth in foreign currency exposures of banks through their Net Open Position, NOP.<\/p>\n

\u201cThe Central Bank of Nigeria (CBN) has noted with concern the growth in foreign currency exposures of banks through their Net Open Position (NOP). This has incentivized banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks. Therefore, the CBN issues the following prudential requirements to ensure these risks are well managed and avoid losses that could pose material systemic challenges.\u201d<\/p>\n

\u201cFor example, a bank borrows or buys $ 1 million worth of forex but then holds half of it in its position instead of lending it or using it to finance purchases for its clients immediately.<\/p>\n

\u201cWhat this means is that banks can profit from currency depreciation if they buy the forex low and sell high\u201d, it stated.<\/p>\n

Also, the CBN added that \u201cbanks with current NOPs exceeding these limits must adjust their positions to comply with the new regulations by February 1, 2024.<\/p>\n

\u201cAdditionally, banks must calculate their daily and monthly NOP and Foreign Currency Trading Position (FCT) using specific templates provided by the CBN\u201d.<\/p>\n

The Naira woes worsened on Tuesday, crashing 42 per cent against the US dollar in the foreign exchange market in the last two days.<\/p>\n

For More News And Analysis About Nigeria<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Nigeria. Amid the free fall of the Naira in the foreign exchange market, the Central Bank of Nigeria has issued fresh guidelines to commercial banks against currency speculation and hoarding. CBN disclosed this on Wednesday in the circular titled, \u2018Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks, signed by Directors of […]<\/p>\n","protected":false},"author":84,"featured_media":109175,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[1570,2140,503,12608,254],"class_list":["post-109176","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-nigeria-2","tag-cbn","tag-forex-crisis","tag-nigeria"],"yoast_head":"\nForex Crisis: CBN issues fresh guidelines to banks against foreign currency speculation, hoarding - Nigeria<\/title>\n<meta name=\"description\" content=\"Amid the free fall of the Naira in the foreign exchange market, the Central Bank of Nigeria has issued fresh guidelines ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Forex Crisis: CBN issues fresh guidelines to banks against foreign currency speculation, hoarding\" \/>\n<meta property=\"og:description\" content=\"Amid the free fall of the Naira in the foreign exchange market, the Central Bank of Nigeria has issued fresh guidelines ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding\" \/>\n<meta property=\"og:site_name\" content=\"Nigeria\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-31T20:52:39+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-31T23:25:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/nigeria\/sites\/3\/2024\/02\/sm_1706727070.833806.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Forex Crisis: CBN issues fresh guidelines to banks against foreign currency speculation, hoarding\",\"datePublished\":\"2024-01-31T20:52:39+00:00\",\"dateModified\":\"2024-01-31T23:25:31+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding\"},\"wordCount\":340,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/nigeria\/sites\/3\/2024\/02\/sm_1706727070.833806.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Nigeria\",\"CBN\",\"forex crisis\",\"Nigeria\"],\"articleSection\":[\"all news\",\"Economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding\",\"url\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/forex-crisis-cbn-issues-fresh-guidelines-to-banks-against-foreign-currency-speculation-hoarding\",\"name\":\"Forex Crisis: CBN issues fresh guidelines to banks against foreign currency speculation, hoarding - 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