CBN reads riot act on utilisation of free funds

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The Central Bank of Nigeria (CBN) on Monday August 22, 2016, stated that it noticed that some authorized dealers in the FX market have continued to buy and sell FX referred to as “free funds” despite the provision of an earlier circular that warned against that.

Against the background, it stressed that dealing on FX without appropriate documentation, which includes “relevant entries, blotters, physical documents and non-disclosure to the regulatory authorities is a breach of extant regulations”

The apex regulator therefore reiterated that as provided in the laws and regulations governing dealings in FX, authorized dealers “shall not sell foreign exchange without appropriate documentation and disclosure to the regulatory authorities irrespective of the source of such funds.”

Accordingly, authorized dealers shall deal in eligible transactions only and not to engage in any foreign exchange transactions on terms inconsistent with the extant laws and/or regulations” the CBN stated in a circular posted on its website last night.

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