Abuja - The Central Bank of Nigeria cuts the limit on banks' foreign currency borrowings to 75 percent of shareholders’ funds from 200 percent, according to a central bank circular seen by Reuters.
The new regulation, in a document dated October 24, replaces a 2001 rule capping foreign borrowings at 200 percent of shareholders’ funds.
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It also requires banks to have adequate liquid foreign assets including cash and government securities to cover maturing foreign obligations and a contingency arrangement with other financial institutions to cover loan repayment.
The bank is trying to manage exchange rate risks and curb pressures on the naira from excess demand for dollars.