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Banks must not pay dividend from FX revaluation gains – CBN

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Depleted foreign reserves used to settle obligations, not to defend naira - CBN gov

The Central Bank of Nigeria (CBN) has ordered that Banks should not pay dividends or meet operating expenses from FX revaluation gains.

In a circular tilted “Impact of Recent FX Reforms: Prudential Guidance to the Banking Sector” available on the website of CBN, the apex bank stated thus:

Further to our letter dated September 11, 2023, referenced BSD/DIR/CON/LAB/16/020 on the above subject, the CBN wishes to reiterate that banks are required to exercise utmost prudence and set aside Foreign Currency revaluation gains as a counter-cyclical buffer to cushion any adverse movement in the FX rate.

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In this regard, banks shall not utilize such FX revaluation gains to pay dividends or meet operating expenses.

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