*Says Domiciliary FX Conversion Disagrees With Liberal Market Reforms
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Central Bank of Nigeria (CBN) Governor Yemi Cardoso said the apex bank has discovered $2.4 billion invalid forex outstanding claims pressuring the naira and causing anxiety in the currency market.
Cardoso disclosed this in an interview with Arise Television on Monday.
According to Cardoso, this was uncovered during an audit by the consultant the CBN hired, which exposed a number of dubious transactions.
The CBN Governor stated that the apex bank commissioned Deloitte to look into the FX allegations to provide a true picture of the situation.
Cardoso said ,according to the Deloitte assessment, up to $2.4 billion of the backlog consists of fictitious claims, with claimants in certain cases being unable to provide import documentation.
“We had had reasons to believe we needed to take a harder look at these obligations. So we contracted Deloitte management consultants to do a forensics of all these obligations and to actually tell us what was valid and what was not,” Mr Cardoso said.
“The result that came out of this was startling in a great respect. It was startling. We discovered that of the roughly $7 billion, about $2.4 billion had issues, which we believe had no business being there and the infractions on that ranged from so many things, for example not having valid import documents and in some cases entities that do not exist,” he said.
Cardoso, also said that converting domiciliary account dollars to Naira is not possible because it disagrees with reforms of a liberal market.
Olayemi Cardoso gave further clarification regarding the fake report about CBN planning to convert dollars in domiciliary account into Naira, while appearing in an exclusive interview with Arise TV, Monday 5th of February 2024.
According to the Apex bank governor, the FG would not consider attaching the domiciliary account because it does not align with the strategy of the CBN to create a free entry and exit market.
His statement reads: “There has been a recent publication that stated that the FG had intentions of using the domiciliary account and converting to Naira.
“The reforms you have seen in the past month have embraced the situation of free entry and exits.
“Attaching a domiciliary account goes against a liberal market.
“We certainly would not do a thing like that. It has never come up for discussion. It does not fall into the overall strategy of the central bank,” Cardoso insists.
The Central Bank of Nigeria over the weekend debunked reports stating that the CBN was trying to save the naira by converting domiciliary dollar funds to naira.
The Nigerian Tribune also reported that the Central Bank of Nigeria issued a directive for all banks to sell their excess foreign exchange holding within 24 hours or face sanction.
On Friday, 2nd of February, 2024, the CBN ceased daily debits and adopted an updated Cash Reserve Requirement (CRR) mechanism that is intended to facilitate banks’ capacity for planning, monitoring, and aligning records with the CBN.
On the same Friday, the CBN also established a minimum operating capital requirement for International Money Transfer Operators (IMTOs) set at $1 million for foreign entities and an equivalent amount for local IMTOs.
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