NIGERIA: The Central Bank of Nigeria (CBN), in a letter to all banks, approved a number of prudential guidance and directives for immediate implementation by the banks upon assessment of the impact of currency devaluation on banks’ balance sheets.
The revaluation of foreign currency assets and liabilities has expectedly resulted in outsized gains/losses across the banks. In the letter, the CBN urged banks to exercise prudence in utilizing revaluation gains by setting aside these sums as a counter-cyclical buffer to cushion any further fluctuations in the currency. The CBN also granted forbearance to banks who inadvertently breach the single obligor limit on existing facilities due to the currency movement as well as banks that exceed the Net Open Position prudential limits.
