CBN Enforces Ban on Foreign Exchange as Security for Naira Loans in Nigeria
The Central Bank of Nigeria (CBN) has taken a decisive step by prohibiting the use of foreign exchange as collateral for local currency loans.
In an effort to stabilize the Naira amidst ongoing U.S. dollar shortages, the CBN issued a letter to all Nigerian banks instructing them to comply immediately with the new directive. This move is part of a broader strategy by Nigerian monetary authorities to revive the official foreign currency market and stem the depreciation of the Naira against major currencies like the U.S. dollar. Failure to adhere to the directive could result in severe consequences for banks, including risk-weighted penalties and regulatory sanctions.
Additionally, the CBN announced plans to sell USD to Bureau de Change operators at a fixed exchange rate, aiming to maintain stability in the foreign exchange market.
Clever Robot News Desk 12th April 2024
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