CBN bans use of foreign currency as collateral for naira loans

The Central Bank of Nigeria (CBN) has banned the use of foreign currencies as collaterals for naira loans.

The CBN gave the directive in a circular dated April 8, 2024, signed by its Acting Director of Banking Supervision, Adetona Adedeji, and addressed to all banks in the country.

However, the apex bank listed two exceptions to the rule as foreign currency collateral which are Eurobonds issued by the Federal Government or guarantees of foreign banks, including Standby Letters of Credit.

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