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FACT-CHECK: No! CBN not converting domiciliary account holding into naira

The PUNCH Newspapers on Saturday claimed that there were strong indications that the Federal Government is mulling 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.

CBN not converting domiciliary account holdings into naira
CBN not converting domiciliary account holdings into naira

The Claim

The PUNCH Newspapers on Saturday claimed that there were strong indications that the Federal Government is mulling 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 Background

In June 2023, days after the inauguration of President Bola Ahmed Tinubu, the Central Bank of Nigeria (CBN) directed commercial banks to sell forex freely at market-determined rates—a “willing buyer, willing seller” arrangement. The new policy places the country’s currency on ‘free-floating exchange status’. 

A free-floating exchange rate is a situation where the government allows the exchange rate to be determined purely by market forces and there is no provision for the central bank to influence the external value of the exchange rate.

Within eight months of the implementation of the policy, exchange rates in the country can be described as ‘hitting the roofs. A situation that makes the dollar exchange between $1 to N1,520 at the parallel market on Tuesday this week. This led to the shutdown of the Abuja Bureau De Change operators on Wednesday in the Federal Capital Territory (FCT).

This amongst other issues led to the speculations that the CBN is planning to convert $30bn domiciliary deposits in commercial banks across the country into naira to stabilize the country’s currency.

The Verification

DailyAgent Check noted that the apex bank had debunked the claim.

In a statement on Saturday, CBN described it as a false which was aimed to trigger panic in the foreign exchange market.

“The attention of the Central Bank of Nigeria (CBN) has been drawn to a story published by a national newspaper alleging that the Federal Government is considering converting $30bn domiciliary deposits to Naira. 

“This allegation is absolutely false and aims to trigger panic in the foreign exchange market, which the CBN is working assiduously to stabilize, as evidenced by its recent work and policy directions,” the statement reads.

The Verdict

The claim is FALSE!

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