FG and CBN Dismiss Allegations of Converting $30 Billion Domiciliary Deposits to Naira

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The Federal Government (FG) and the Central Bank of Nigeria (CBN) have categorically denied any plans to convert $30 billion domiciliary deposits into naira, refuting recent reports that suggested such measures were being considered to address the foreign exchange (forex) crisis and prevent further devaluation of the naira.

In a statement released on Saturday, Finance Minister and Coordinating Minister of the Economy, Wale Edun, dismissed the reports as baseless, emphasizing that there is no intention to convert foreign currency in depositors’ domiciliary accounts to naira. He labeled the publication of such information as “economic sabotage” and reiterated the government’s commitment to restoring economic stability and confidence in the national currency.

The CBN, via its official communication channel, also discredited the reports, branding them as fake and affirming that there are no plans to convert the $30 billion domiciliary deposits to naira.

Edun, in his statement, declared, “For the avoidance of doubt, I emphasize that depositors’ foreign currency in their domiciliary accounts will not be converted to naira.”

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Similarly, the CBN stated, “No plans to convert $30bn domiciliary deposits to naira. This news is fake!”

Addressing the false claims, Mrs. Hakama Sidi-Ali, the acting Director of Corporate Communications at the CBN, characterized the allegations as intended to cause panic in the foreign exchange market. She urged the public to disregard such misinformation, emphasizing the CBN’s dedication to stabilizing the market and ensuring the nation’s economic wellbeing.

The reports that emerged earlier suggested a government policy contemplating the conversion of foreign currencies in domiciliary accounts to naira in an effort to stabilize the national currency, which recently experienced its most significant decline in the official Nigerian Foreign Exchange Market.

In response to concerns over forex speculation and hoarding, the CBN had issued a recent circular outlining guidelines to mitigate associated risks. This circular, titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,” addressed the growing foreign currency exposures of banks through their Net Open Position (NOP). The CBN expressed concerns about excessive foreign exchange positions held by banks, giving them until February 1, 2024, to sell off excess dollars in their vaults.

As the government and the CBN reaffirm their commitment to economic stability, it is essential to remain vigilant against false reports that may disrupt the economy, recognizing the CBN as the sole authority for monetary policy changes.

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