The Central Bank of Nigeria (CBN) has accused authorised foreign exchange (FX) dealers, as well as their customers, of giving inaccurate and misleading information about their transactions.
This was contained in a circular signed by Aliyu Ashiru, the acting director of the financial markets department.
Ashiru said investigations had revealed under-reporting of transaction rates and the nefarious practice of “second cheques” in foreign exchange and fixed-income deals.
He warned that these activities would no longer be tolerated as those caught making deliberate attempts to create price distortions by reporting false transaction details will face sanctions.
“All Authorised Dealers are reminded that the Central Bank of Nigeria (CBN) has permitted financial markets transactions to be conducted on a ‘willing buyer willing seller’ basis, and therefore expects prices to be quoted and displayed in a transparent manner,” CBN said.
“The attention of the CBN has been drawn to the practice of Authorised Dealers (and their customers) in reporting inaccurate and misleading information on transactions concluded in the financial market.
“Ongoing investigations have revealed instances of under-reporting of transaction rates and the practice of ‘second cheques” on foreign exchange and fixed income transactions.
“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,” Ashiru added.
He reiterated the commitment of the CBN to a transparent and well-functioning financial market and enjoined all stakeholders to carry out their legitimate businesses in compliance with the rules and guidelines as published by the CBN.
