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No Plans To Convert Domiciliary Account Holdings Into Naira – CBN



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The Central Bank of Nigeria has said that it has no plan to convert domiciliary account holdings into naira.

The financial regulator said this in a statement signed by its Acting spokesperson, Sidi Ali, on Saturday.

It said the bank was working hard to stabilise the foreign exchange market “as evidenced by its recent work and policy directions.”

The apex bank assured Nigerians that it was working to build the confidence of citizens in the economy and would not do the contrary.

“We want to assure the general public that CBN is working to build confidence and would never do anything to undermine the currency and the economy,” the statement read.

The CBN added that “the bank is the only designated authority for monetary policy changes and will always advise on any policy change(s) before they are brought into operation. The CBN is always open to answer questions about our policies.”

Saturday Instantnews had reported exclusively that the Federal Government is considering a policy that will result in the conversion of foreign currencies in domiciliary accounts of citizens to naira to stabilise the national currency, which earlier this week recorded its worst performance in history.

The newspaper had reported that if it goes ahead with the plan, the government may 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.

Instantnews had earlier quoted the CBN as expressing concern over the growth in foreign currency exposures of banks through their Net Open Position.

The apex bank disclosed this in a circular to all the banks signed by its Director, Trade and Exchange, Dr. Hassan Mahmud and the Director, Banking Supervision. Mrs. Rita Sike.

The bank noted that “such foreign currency positions expose banks to foreign exchange and other risks.”

CBN stated that to ensure that these risks are well managed and avoid losses that could pose material systemic challenges, it has issued new prudential requirements for banks to comply with.

The apex bank said the Net Open Position limit of the overall foreign currency assets and liabilities taking into cognizance both those on and off-balance sheet should not exceed 20 per cent short or 0 per cent long of shareholders’ funds unimpaired by losses using the Gross Aggregate Method.

Also, banks whose current NOP exceeds 20 per cent short and 0 per cent long of their shareholders’ funds unimpaired by losses are required to bring them to the prudential limit by February 1, 2024.

They are also required to compute their daily and monthly NOP and Foreign currency trading position using approved templates.

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