Bank Directors Association of Nigeria (BDAN) has voiced its approval of the Central Bank of Nigeria’s (CBN) directive urging commercial banks to cease “hoarding” foreign currencies.
The CBN recently expressed concerns about the increasing exposure of banks to foreign currencies through their Net Open Positions (NOP). In response, it issued a circular titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,” instructing banks to liquidate all surplus dollar holdings to their customers.
BDAN, in a statement released by its Chairman, Board of Directors, Mustafa Chike-Obi, on Monday, expressed its full support for these measures, emphasizing their role in fortifying the nation’s financial system.
“These comprehensive measures underscore the commitment of the CBN to ensuring the stability and resilience of the banking sector,” the statement read.
Following the issuance of the CBN directive, dollar supply surged by 180 percent to $440 million at the official foreign exchange market (NAFEM).
BDAN lauded the directive, stating, “This directive, along with other prudential requirements outlined in the circular, plays a critical role in ensuring the effective management of foreign currency exposures.”
The association acknowledged the strategic initiative of the CBN aimed at enhancing risk management, transparency, and accountability within the financial industry, emphasizing the importance of safeguarding the interests of depositors, investors, and the overall economic well-being of Nigeria.
BDAN affirmed its commitment to collaborating with the CBN and other stakeholders to foster a resilient financial ecosystem, believing that these steps will contribute to the long-term sustainability, growth, and stability of the banking sector, thus supporting the nation’s economic development.
In conclusion, BDAN pledged its continuous support for the CBN’s efforts, expressing confidence that the measures taken are in the right direction to enhance the effectiveness of the banking system.
