CBN Warns Forex Dealers Against False Reporting and Market Manipulation

The Central Bank of Nigeria (CBN) has issued a stern warning to Authorised Dealers in the foreign exchange market who are reporting false and misleading information on their transactions. The CBN said that such dealers and their customers are violating the ethical standards of a sound financial market and will face sanctions.

According to a circular signed by the acting director of the financial markets department at the CBN, Aliyu Ashiru, the bank has discovered cases of underreporting of transaction rates and the use of ‘second cheques’ on foreign exchange and fixed-income transactions. These practices are aimed at creating price distortions and manipulating the market.

The CBN reminded the dealers that it had allowed financial markets transactions to be conducted on a ‘willing buyer willing seller’ basis, which requires prices to be quoted and displayed transparently. However, many of the dealers have disregarded this order and have been reporting inaccurate and misleading information.

The CBN said that it will not tolerate such behaviour and will impose sanctions on any dealer or customer who engages in false reporting or market manipulation. The bank urged the dealers to comply with the rules and regulations of the market and to report their transactions accurately and honestly.