CBN debunks Alleged Plans to Convert $30 Billion Domiciliary Deposits into Naira.

The bank said the allegation is false and only aims to trigger panic in the foreign exchange market, which the CBN is working assiduously to stabilise

The Federal Government and the Central Bank of Nigeria (CBN) have refuted claims that it intends to convert $30 billion domiciliary deposits into naira currency as a strategy to address the foreign exchange (forex) challenges and stabilize the value of the naira which reached its lowest point (1500/$) in the last week.

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In a statement released on Saturday, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, categorically denied the validity of the report, asserting that it contains no shred of truth and labeling it as entirely false. 

Similarly, the CBN, through its official social media account on X (formerly Twitter) on February 3, 2024, labeled the report as fake. 

Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, further reacting to the news in a statement on Saturday said:

• “There is no iota of truth in the claims of Punch Newspaper that the Federal Government plans to convert foreign exchange in depositors’ domiciliary accounts to naira.

• “The publication of such falsehood. at a time when the government is working  to restore economic stability and confidence in the national currency is tantamount to economic sabotage.

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

Where did the Rumor start?

Punch, a reputable news media, had reported that there were strong indications that the Federal Government was mulling a policy that will result in the conversion of foreign currencies in  domiciliary accounts of citizens to naira to stabilize the national currency, which earlier this week recorded its worst performance in history.

It had said that if the Nigerian government goes ahead with the plan, the government will order the conversion of foreign currencies sitting idly in individuals’ and corporate organizations’ domiciliary accounts to naira at a rate to be determined by the Central Bank of Nigeria.

But it is worthy of note, that the effect of the conversion may not have much effects as proposed because the value of a currency, is determined by its demand.