[August 29, 2011] CBN Investigates 21 Banks Over Forex Round Tripping Tweet Aug 29, 2011 (Daily Trust/All Africa Global Media via COMTEX) -- The Central Bank of Nigeria (CBN) has commenced forensic investigation into the alleged round tripping of foreign exchange transactions by some commercial banks. The News Agency of Nigeria (NAN) quotes a CBN source, who spoke on condition of anonymity on Friday, as saying that the investigation would in the interim be limited to only 21 commercial banks. Round tripping refers to a process whereby funds are obtained from the official foreign market (at lower rates), diverted to other markets and sold at a higher rate by banks and users. The source said that the three recently rationalised banks would be exempted for now to allow the new interim management to settle down. The official told NAN on Friday in a telephone interview that the investigation was a fallout of allegations of round tripping by the top management and boards of operating commercial banks. According to him, CBN embarked on the exercise to ascertain the true position of issues, especially against the recent high level speculation and hoarding of foreign exchange by some banks. NAN also gathered that the investigation would in addition provide CBN with contemporary foreign exchange transaction data for monetary and fiscal policy planning. The official said that the investigation which has the nod of the presidency also coincided with the recent worries by the government on persistent wide margin between the official and black markets exchange rates. When contacted, Mr Mohammed Abudulahi, Head of Corporate Communications of CBN, who confirmed the report through a text message simply said "the exercise is already on". NAN recalls that CBN had on Aug. 24 intervened in the nation's forex market with 10 million dollars through Bureaux De Change, under a special forex fund. According to analysts, the CBN special forex fund was designed to meet expectations and bring down the exchange rate to about N150 to one dollar. NAN reports that CBN had only two weeks ago increased the total forex sold to BDCs weekly from 50,000 dollars to 100,000 dollars to reduce speculation and strengthened the local currency. NAN [ Back To TMCnet.com's Homepage ]