The Board of Director Association of Nigeria (BDAN) urges all bank to yield to the directives of CBN over the foreign currency exposure.
The CBN urges all commercial banks and others Banks that deals with foreign currency to sell all excess foreign foreign currency and have only the maximum amount stated by CBN.
It was stated in the directives that the Net Open Positin (NOP) limit for overall foreign currency asset and liability should not exceed 20% short or 0% long of shareholders funds.
BDAN said in a statement on Monday “The Association wholeheartedly supports these comprehensive measures which underscore the commitment of the CBN to ensuring the stability and resilience of the Banking sector.”
“This directive, along with other prudential requirements outlined in the circular, plays a critical role in ensuring the effective management of foreign currency exposures. By imposing these limits, the CBN aims to mitigate potential losses that could pose significant systemic challenges.”
“These regulatory measures underscore a strategic initiative aimed at bolstering risk management, transparency, and accountability within the financial industry. The Bank Directors Association of Nigeria (BDAN) acknowledges and commends the Central Bank for its proactive stance in safeguarding the interests of depositors, investors, and the overall economic well-being of Nigeria.”
The Association said: “Amid concerns surrounding the escalating foreign currency exposure of Banks through their Net Open Positions, the leadership of the Central Bank of Nigeria (CBN) has issued a circular titled ‘Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks.’