The Central Bank of Nigeria has denied reports that it planned to convert a $30bn domiciliary deposit to naira.
This rebuttal is coming after reports (not THE WHISTLER) said the CBN plans to convert domiciliary deposits of individuals and corporate organisations to naira.
The move was reportedly aimed at abating the rate of plunge of the naira.
The reports also said the rate of conversion of the funds will be determined by the CBN.
The naira had recorded the worst fall against the United States dollar since the inception of democracy.
THE WHISTLER earlier reported on Wednesday that at the Nigerian Autonomous Foreign Exchange Market, the naira fell to around N1,480, from the N900 which it was in December 2023.
The dollar gained further against the naira and was traded at N1,520 per dollar at the BDC segment on the Nigerian Foreign Exchange Market on Wednesday.
Reactung to the claims, the apex bank said on its verified X account that there is “No plans to convert $30bn domiciliary deposits to naira. This news is fake!”.
THE WHISTLER on Monday reported that the CBN released $500m for backlog clearance barely a week after paying approximately $2bn to settle outstanding commitments across manufacturing, aviation, and petroleum sectors.
This move by the apex bank was to restore investors’ confidence in the sector and boost the country’s forex reserve.
However, the Chief Executive Officer of the Centre for the Promotion of Private Enterprises, Mr. Muda Yusuf noted that the naira depreciation is not a quick fix, because the currency can only be as strong as its reserves.
“Ideally, the CBN should not be the main provider or supplier of foreign exchange. Because of the confidence crisis that we have had as a result of clearing of backlog, sorting out liquidity issues and already trapped funds, the challenge of stabilizing the market or providing for the market has now rested on the CBN.
“Also, we have a situation where we have a reserve that has been severely depleted because you can only defend the currency to the extent of the reserves that you have. These are fundamental deficiencies and can not be fixed quickly.
“This is a fairly complex matter, but I believe that it’s steps that have been taken by prioritizing the clearance of the backlog, and I think it’s a step in the right direction,” he said.