In a bid to counter the unprecedented decline of the national currency, the Federal Government, in collaboration with the Central Bank of Nigeria (CBN), is contemplating a strategic move to convert $30 billion worth of domiciliary deposits owned by Nigerians into naira.
This initiative, as reported by The PUNCH, aims to stabilize the alarming performance of the naira, which recently experienced its most significant dip in history, particularly in official exchange markets.
According to sources, the government is considering implementing a policy that mandates the conversion of foreign currencies stored in both individual and corporate domiciliary accounts to naira. The conversion rate will be determined by the CBN. This proactive measure is designed to counteract the substantial fall of the naira, which recently closed at N1,348 per dollar in the official Nigerian Foreign Exchange Market (NAFEM) on a tumultuous Monday.
A source from the presidency asserts that the issue of forex scarcity and the naira’s depreciation primarily affects the elite, emphasizing that the Federal Government is determined not to passively witness individuals hoarding foreign currencies to the detriment of the national currency.
Addressing concerns of excessive foreign currency speculation and hoarding, the CBN recently released a circular titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks.” This circular introduces guidelines aimed at mitigating risks associated with banks maintaining large foreign currency positions. The CBN has accused banks of holding surplus foreign exchange positions, setting a deadline of February 1, 2024, for the sale of excess dollars held in their vaults.
