CBN Fumes, Warns Forex Dealers Against Market Manipulation

Authorized dealers have been forewarned by the Central Bank of Nigeria (CBN) to make sure that currency market transactions are transparent and that any type of pricing distortion that results in market manipulation would be subject to punishment.

Investigations have shown instances of underreporting of transaction rates and fixed income transactions, the apex bank revealed this in a statement made yesterday by Aliyu, M. Ashiru, Director of the Financial Market Department.

According to the statement, the apex bank allows financial market transactions to be conducted on a “willing buyer, willing seller” basis.

Read Also: CBN Redeploys About 1,500 Staff To Lagos Office

It stated, “All Authorised dealers are reminded that the Central Bank of Nigeria (CBN) has permitted financial market transactions to be conducted on a ‘willing buyer, willing seller’ basis, and therefore expects prices to be quoted and displayed transparently”

“The attention of the CBN has been drawn to the practice of authorized dealers (and their customers) in reporting inaccurate and misleading information on transactions concluded in the financial market. Ongoing investigations have revealed instances of underreporting of transaction rates and practice of second cheques on foreign exchange and fixed income transactions”

The lender of last resort further warned that such practices run counter to the ethics of proper financial market and will not be tolerated going forward.

It said, “Deliberate attempts to create price distortion by reporting false transaction details amounts to market manipulation which will not be tolerated and henceforth face sanctions”