THE Central Bank of Nigeria (CBN) stated today that there are no plans to change $30 billion in foreign currency deposits to the local currency, the naira.
Reports on some media outlets (Not Naijatimes) had suggested that the government and central banks were considering such a conversion to stabilize Nigeria’s currency, which recently experienced its worst performance in history.
However, the CBN dismissed these reports as “fake news” and urged the public to ignore such speculation.
“No plans to convert $30bn domiciliary deposits to naira. This news is fake!,” the post reads.
This response is coming following CBN’s previous directives to Deposit Money Banks (DMBs) to sell their excess dollar stock by February 1, 2024, as part of efforts to stabilize the nation’s volatile exchange rate.
“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 read.
The CBN had expressed concerns about banks holding large foreign currency positions and warned against false reporting of exchange rates.
The circular issued by the CBN also outlined prudential requirements for banks, including limits on their Net Open Position (NOP) to manage foreign exchange risks.
This development is coming on the heels of naira’s significant depreciation in the official Nigerian Foreign Exchange Market, falling by 24% to close at N1,348 per dollar.
