In a circular from the apex bank on Thursday signed by the acting Director, the Banking Supervision Department, Adetona Adedeji, banks were warned against such a move.

“Further to our letter dated September 1, 2023, referenced BSD/DIR/CON/LAB/16/020 on the above subject, the Central Bank of Nigeria wishes to reiterate that banks are required to exercise utmost prudence and set aside FCY revaluation gains as a counter-cyclical buffer to cushion any adverse movements in the FX rate.

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

The CBN had in September directed Deposit Money Banks to stop utilising gains from their foreign exchange revaluation for dividends and operational expenditures.

In a letter dated September 11, 2023, and signed by then CBN Director, Banking Division Department, Haruna Mustafa, the apex bank said the new directive was expected to be implemented immediately.

Forex revaluation gains occur when there is an increase in the value of a bank’s assets and liabilities denominated in foreign currency due to a change in the exchange rate between the foreign currency and the local currency.