To the dismay of the populace, the naira’s decline against the US dollar both the official and black market foreign currency exchanges on Monday continued. This occurred when the naira fell to a new all-time low of N1,730/$ in the parallel section of the foreign currency market.
According to information obtained, the occurrence prompted agents of the Economic and Financial Crimes Commission to conduct raids on Monday at several Bureau De Change locations in Abuja, where they apprehended currency dealers who they believed were engaging in naira-denominated speculation. This is an N60, or 3.59%, decrease from the N1,670/$ reported at the black market’s Friday closing of business.
The naira depreciation followed a strong demand for dollars by speculators as well as individuals travelling for business, tourism, education and health, according to currency dealers. The development came amid recent moves by the Central Bank of Nigeria to boost forex supply through various policy interventions.
Currency traders in Lagos and Abuja quoted the buying price of the dollar at N1,700 and the selling price at N1,730 — leaving a profit margin of N30.
“Customers are demanding the dollars so much and it is affecting the market rates,” a Wuse, Abuja-based black market trader known as Abubakar Taura said.
The dollar was sold for N1,725 according to Ibrahim Yahu, another operator headquartered at the Abuja airport, who also said that there was strong demand for the currency all day long. The naira fell 2.65% at the official window on Monday, from N1,537.96/$ on Friday to N1,574.62 on Monday. Sales of dollars to the market dropped to $66.43 million as well.
The situation, according to analysts, may be similar to trade at the Nigerian Autonomous Foreign Exchange last week, which began on Monday at an all-time low of N1,534/$ and moved up to N1,499/$ on Tuesday. However, the naira dropped to N1,503.38/$ at Wednesday’s trading end before rising to N1,498/$ at Thursday’s trading close. It put an end to the week at the rate of N1,537/$.
The fresh rates also created about N156 or 9.91 per cent gap between the official and parallel market, indicating concerns about round-tripping. According to data from FMDQ Securities, a platform that oversees foreign exchange trading in Nigeria, the local currency hit an intra-day trading high of N1,712 and a low of N1,100 before closing at N1,598/$ on Monday.
Also, the naira was exchanged above N2,000 against the Great Britain Pound at the parallel market on Monday but sold at 1931/£ at the official market, according to the Central Bank of Nigeria exchange.
A Bureau de Change operator at Wuse Zone 4, Malam Ibrahim, confirmed the rates on Monday.He said, “Yes it is true, we are currently selling above N2,000 for the pounds and it is still about the heavy and consistent demand for these currencies.”
We learned that the new rate increased from N1,930 recorded on Friday and was adjudged the lowest point in the historical performance of the naira. Meanwhile, operatives of the Economic and Financial Crime Commission reportedly arrested over 50 illegal Bureau De Change operators in Wuse Zone 4 Abuja, over the continued fall of the naira at the Foreign Exchange Market.
A Bureau De Change operator, Abubakar Taura, in Wuse Zone 4, stated that on Monday the EFCC personnel came in vans. According to him, the operatives said the raid was meant to sanitise the market following the falling rate of the naira against the US dollar and other major currencies.
“Around 3 p.m. on Monday, officers of EFCC raided Wuse Zone 4 and arrested over 50 of our members. They were complaining that BDC operators are responsible for the rising exchange rate of the Dollar, the parallel exchange market.”
