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Commercial banks in Nigeria rushed to avoid regulatory sanctions from the Central Bank of Nigeria (CBN) by increasing their supply of US dollars at the official foreign exchange market. The supply surged by 180.59% to $440.13 million on Friday.
This comes after the CBN issued a circular expressing concern about banks holding large foreign currency positions. The circular, titled “Harmonization of Reporting Requirements on Foreign Currency Exposures of Banks”, mandated that banks’ Net Open Position (NOP) should not exceed 20% short or 0% long of the banks’ shareholders’ funds going forward.
As a result, the Nigerian Naira appreciated slightly, closing at N1,435.53 per US dollar. The Naira also recorded a gain in the parallel market, trading at 1,440 per US dollar on Friday from N1, 470 the previous day.
