Naira weakens as CBN refutes domiciliary accounts’ conversion rumours

Following speculations that commercial banks intend to target domiciliary accounts of customers in order to have access to more foreign exchange, Naira weakened against the dollar on Monday, selling for N520 to $1 in the bureau de change market – eliminating last week Thursday’s naira gain – while it traded flat on the I&E windows at N411.50 to $1.

Speculations have been making the rounds that commercial banks intend to target domiciliary accounts of customers in order to have access to more foreign exchange.

There are reports that the banks plan to convert foreign exchange in the domiciliary accounts of customers to naira, a decision that some say might cause tension between lenders and customers.

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This comes after the CBN banned sales of forex to the Bureau de Change operators for their involvement in money laundering and other illegal financial conducts.

In a bid to douse the rising tension, the Central Bank of Nigeria said there was no attempt to engage in conversion of the forex account to the local currency.

The CBN’s acting director for corporate communications, Osita Nwanisobi, stated that the reports are being circulated by criminal speculators.

Nwanisobi told reporters on Monday that the perpetrators intend to create panic in the foreign exchange market.

He advised domiciliary account holders and other members of the banking public to carry on with their lawful FX transactions and ignore fabricated reports aimed at putting them against the central bank and causing havoc in the system.

He assured that the CBN will monitor banks’ forex sale activities.