The Central Bank of Nigeria (CBN) on Saturday debunked reports of plans to convert $30 billion domiciliary deposits to naira.
Some news platforms (excluding QEDNG) had reported that the Nigerian government was considering converting foreign currencies in domiciliary accounts of citizens to naira to stabilise Nigeria’s currency.
The reports followed concerns about the dwindling fortune of the naira after it recorded its worst performance in history this week exchanging at N1,348 per dollar at the official market.
However, in a post on X, the CBN led by Governor Olayemi Cardoso dismissed the reports as “fake news”.
“No plans to convert $30bn domiciliary deposits to naira. This news is fake!” the post reads.
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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 warned lenders against hoarding excess foreign currencies for profit.
“The Central Bank of Nigeria has noted with concern the growth in foreign currency exposures of banks through their Net Open Position (NOP). This has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks,” the circular issued on Wednesday read.
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 (what it owns in foreign currencies) and its foreign currency liabilities (what it owes in foreign currencies).
The circular mandates that the NOP must not exceed 20 per cent short or 0 per cent long of the bank’s shareholders’ funds.
