CBN Queries Banks For Forex Rate Manipulating

BEVERLY HILLS, January 30, (THEWILL) – Some commercial banks have been queried by the Central Bank of Nigeria (CBN) for manipulating foreign exchange (forex) transaction rates as the CBN detected the rate manipulations following the mandatory rendition of forex returns and compliance with anti-money laundering regulations.

According to a statement released by the CBN, some of the queried banks manipulated forex rates while others attributed the rate discrepancies to ‘formatting errors’ as it expressed its commitment to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage are able to get LCs to import materials for their businesses.

The CBN said providing forex to the manufacturers and other key players in the economy was meant to enable it keep its promise to strengthen the real sector of the economy by ensuring that 60 per cent of available forex is used to procure industrial inputs, such as raw materials, machine spare-parts, telecom equipment, plastic raw materials, agricultural machines and pre-payment meters, amongst others.

The exercise, the CBN insists, will provide a new lease of life in the manufacturing sub-sector, and also boost industrial output and employment revealing that it will continue to support and facilitate hitch-free procurement of industrial inputs to sustain production in the manufacturing sector to buttresses its commitment to rejuvenate and sustain industrial activities and keeping jobs.

“In line with our principle of transparency, we directed Deposit Money Banks (DMBs) to forward to us evidence of forex sale to end users and to advertise same in national dailies,” the statement read.

“Since the introduction of the new forex policy in 2016, we have published, monthly, the evidence of sale from DMBs, as received from the banks and without any alteration by us in the spirit of transparency. We have recently observed, however, that some DMBs forwarded inaccurate data, which were erroneously published and gave a wrong impression of disparate rates.

“The commercial banks involved in providing inaccurate data has since been issued queries accordingly. Some have returned a response indicating that some of the figures were related to formatting errors which do not affect the true rates of the affected transactions,” the statement read.

“As the constitutionally authorised industry regulator mandated to manage the forex market, maintain external reserves and to safeguard the international value of the legal tender currency, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the forex market.

“Forex sale under the new policy was most transparent and not intended to benefit any individual or corporate body in anyway.

“While we appreciate the concerns of stakeholders, we urge all concerned to verify information on matters relating to the bank and use our available channels to lodge their complaints,” it said.

The CBN’s report on forex utilisation showed last week that it disbursed $1.07 billion to 4,328 manufacturers, power and other real sector operators for the procurement of raw materials, plants and machinery.

Playing prominently in the funding are FirstBank, Zenith Bank, Access Bank, Unity Bank, Union Bank, Wema Bank, and Sterling Bank.

Others are Diamond Bank, GTBank, Fidelity Bank, Jaiz Bank and FBN Merchant Bank.

The report, which was for November, listed some of the beneficiaries as Dana Motors, Dangote Industries, Eat N Go Limited, Flour Mills Nigeria, GX Foods Limited and PZ Cussons.

Others are Indorama Eleme Petrochemicals Limited, Fidson Healthcare Limited, Okomu Oil Palm, MTN Nigeria Communications, Nestle Nigeria Plc, Nigerian Breweries Plc and Nigerian Bottling Company Limited among others.