Banks sell $172m as CBN, EFCC go heads-on with currency speculators

The naira gained marginally against the United States dollar at the Nigerian Autonomous Foreign Exchange Market on Tuesday, closing at N1,542.58/$ from N1,551/$ recorded on
Tuesday.

The rate represents a 2.9 per cent appreciation from the N1,598.54 traded on Monday and a meagre 0.58 per cent against Tuesday’s rate.

According to data from the FMDQ Securities Exchange-a platform that oversees FX trading in Nigeria-the local currency hit an all time intra-day high of N1,755 and an intra-day low of N1,050.

Also, the foreign exchange turnover increased to $172.14m from the $66.43m and $117.32m recorded on Monday and Tuesday, respectively.

Banks sale of approximately $172m on Wednesday represents about 47 per cent increase from the $117m sold on Tuesday. While the sale of forex on the FMDQ is dominated by banks, the Central Bank of Nigeria and multinationals especially oil firms also participate in the sale and purchase of forex on the platform.

The Wednesday’s 1,542.58/dollar closing rate of the national currency at NAFEM further widened the gap between the official and paralleled market rates.

On Wednesday, the naira depreciated further to 1,900 against the dollar at the parallel market, bringing the gap between the official and black market rate to over N300 and fuelling concerns over round-tripping.

Analysts and Bureau De Change Operators predicted that the naira might reach all-time low of 2,000/dollar at the parallel market before the end of next week.

According to reports, Abubakar Yahu, a BDC operator in Wuse, Abuja, said the demand for the greenback was fuelling volatility.

He said, “Today’s rate was at N1,900. We bought at N1,900/dollar and sold around N1,850 and N1,870. Some people say the rate may hit N2,000 by next week or before then.”

On Wednesday, operatives of the Economic and Financial Crimes Commission stormed the Wuse Zone 4 market in search of currency speculators.

The development was part of ongoing efforts by the EFCC and the CBN to restore exchange rate stability and boost forex liquidity.

It was learnt the CBN and the EFCC, supported by the Office of the National Security Adviser were determined to deal with currency speculators whose activities had led to widening gap between the official and parallel market rates of the naira against the US dollar.

The Office of the NSA had in a statement on Tuesday said it was working with the central bank to tackle illicit financial activities.

The partnership, according to ONSA, will involve a coordinated effort with key law enforcement agencies, including the Nigeria Police force, EFCC, Nigeria Customs Service and the Nigeria Financial Intelligence Unit.

However, it appears the efforts have yet to yield the expected results, as the naira continues to fluctuate at both forex markets.

President Bola Tinubu on Tuesday said his administration was making efforts to raise at least $10bn to increase forex liquidity and stabilise the naira.