Bank directors back CBN’s policy on forex assets

The Bank Directors Association of Nigeria (BDAN) has backed the Central Bank of Nigeria’s (CBN’s) policy aimed at fortifying the nation’s financial system.

Recall that amid concerns surrounding the escalating foreign currency exposure, the CBN issued a circular titled: “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks”, where it stipulated that the Net Open Positions (NOP) limit for overall foreign currency assets and liabilities should not exceed 20 per cent short or zero per cent long of shareholders’ funds.

In a statement, the Chairman, Board of Directors of BDAN, Mustafa Chike-Obi, said, “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.

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“These regulatory measures underscore a strategic initiative aimed at bolstering risk management, transparency and accountability within the financial industry. BDAN acknowledges and commends the central bank for its proactive stance in safeguarding the interests of depositors, investors and the overall economic wellbeing of Nigeria.

“BDAN views these requirements as a positive step towards creating a resilient financial landscape and preventing adverse effects on the banking sector. The association applauds CBN’s commitment to proactive regulation and remains supportive of initiatives that contribute to the stability and prosperity of the Nigerian economy.”