CBN Bans Use of Foreign Currencies as Collateral for Naira Loans
In a directive sent to all banks in Nigeria, the Central Bank of Nigeria (CBN) has instructed them to cease the practice of accepting foreign currencies as collateral for naira loans.
The announcement was made via a circular uploaded to the central bank’s website on Monday.
The apex bank cited its observation of customers utilizing foreign currencies (FCY) as collateral for naira loans, prompting the immediate prohibition of this practice.
This move signifies a significant policy shift aimed at safeguarding the stability of the Nigerian financial system.
Meanwhile, the CBN has resumed the sale of dollars to Bureau De Change (BDC) operators, as announced in a circular posted on its website on Monday.
According to a circular, the apex bank disclosed its plan to allocate $10,000 to each BDC at a rate of N1101 per dollar. Additionally, the bank directed the operators to adhere to a pricing spread not exceeding 1.5 percent above the CBN rate when selling the allocated dollars.
