The Central Bank of Nigeria’s (CBN) strategy to strengthen the country’s financial system has the support of the Bank Directors Association of Nigeria (BDAN).
Remember that the CBN issued a circular titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks” in response to concerns about the growing foreign currency exposure. In this circular, the CBN stated that the Net Open Positions (NOP) limit for total foreign currency assets and liabilities should not exceed 20% short or 0% long of shareholders’ funds.
“The association wholeheartedly supports these comprehensive measures which underscore the commitment of the CBN to ensuring the stability and resilience of the banking sector,” said Mustafa Chike-Obi, Chairman of the BDAN Board of Directors, in a statement.
This instruction is essential to ensure the efficient management of foreign currency exposures, as are the other prudential measures included in the circular.
The CBN hopes to reduce possible losses that can cause serious systemic issues by enforcing these restrictions.These regulations are part of a larger strategy to support the financial industry’s efforts to improve risk management, accountability, and transparency.
The central bank’s proactive approach to defending the interests of investors, depositors, and Nigeria’s general economic well-being is acknowledged and applauded by BDAN.
According to BDAN, these regulations are a step in the right direction towards building a stable financial environment and averting negative consequences for the banking industry.
The organisation continues to support programmes that advance the stability and prosperity of the Nigerian economy and commends CBN for its dedication to proactive regulation.