No plans to convert $30bn domiciliary deposits to naira, says CBN

The Central Bank of Nigeria (CBN) says there are no plans to convert $30 billion deposits in domiciliary accounts to naira. 

A report, on Saturday, had claimed that the apex bank  is considering a policy that will result in the conversion of foreign currencies in domiciliary accounts of citizens to naira to stabilise increase liquidity in the FX market.

According to the report, a source had said the government will order the conversion of foreign currencies sitting idly in individuals’ and corporate organisations’ domiciliary accounts to naira — at a rate to be determined by the CBN.

However, the apex bank, in a post on its official X handle on Saturday, debunked the report, describing it as fake news.

“No plans to convert $30bn domiciliary deposits to naira. This news is fake!” CBN said.

There have been speculations that dollars denominated deposits of individuals may be at risk following recent moves by the CBN to restore normalcy in the foreign exchange (FX) market.

On January 31, 2024, the CBN directed banks to sell dollars to prevent losses.

The CBN had said the net open position (NOP) limit of the overall foreign currency assets and liabilities of banks should not exceed “20% short or 0% long of shareholders’ funds”.

The apex bank said the move was due to concerns over the growth in foreign currency exposures of banks through their NOPs.

The regulatory body also removed the allowable limit of exchange rate quoted by the international money transfer operators (IMTOs).

The CBN directed IMTOs to use prevailing market rates in Nigeria’s FX market.

Following the announcement of the policies, the naira, on February 2, 2024, appreciated at the official section of the FX market, closing at N1,435 per dollar.