The Central Bank of Nigeria, CBN says there is no plan to convert 30 billion dollars domiciliary deposits to naira.
This, the financial institution said, is in reaction to reports that the Federal Government and the apex banks were considering the conversion of foreign currencies in domiciliary accounts of citizens to naira to stabilise Nigeria’s currency, which earlier this week recorded its worst performance in history.
However, the apex bank dismissed the report as “fake news” in a post on Saturday, urging the public to disregard such speculations.
The apex bank’s reaction comes two days after it ordered Deposit Money Banks (DMBs) to sell their excess dollar stock latest February 1, 2024, as part of moves to stabilise the nation’s volatile exchange rate.
The CBN had a circular released on Wednesday warning lenders against hoarding excess foreign currencies for profit.
In the circular titled, “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks”, the apex bank raised concerns over the growing trend of banks holding large foreign currency positions.
The apex bank had earlier warned banks and Foreign exchange dealers against reporting false exchange rates, among others.
The CBN accused banks of holding excess foreign exchange positions.
The CBN also issued prudential requirements that banks must follow. A key focus of these requirements is the management of the Net Open Position (NOP) which measures the difference between a bank’s foreign currency assets and its foreign currency liabilities.
On Monday, the naira recorded its biggest fall in the official Nigerian Foreign Exchange Market, depreciating by 24 percent to close at 1,348 naira per dollar.