EFCC Cracks Down on Currency Speculation as Naira Slips to 1,520/$

'Refrain From Using Our Brand Without Permission' - EFCC To Skit Makers

In a bid to address the recent slide of the naira against the dollar, the Economic and Financial Crimes Commission (EFCC) intensified its crackdown on Bureau De Change (BDC) operators across major Nigerian cities, including Abuja, Lagos, Kano, and Port Harcourt.

The raids on Tuesday were part of the government’s renewed efforts to combat the currency’s depreciation, which has been exacerbated by activities in the forex and cryptocurrency markets, with some traders allegedly speculating against the national currency.

Last week, similar arrests were made in Abuja, targeting individuals suspected of currency speculation. Despite resistance from some quarters, law enforcement agencies have persisted in conducting operations against unauthorized currency traders, particularly in Abuja.

Reports from currency operators indicate that the EFCC’s actions have created apprehension among traders, resulting in cautious trading activities. The naira was reported to have traded between N1,520 and N1,540 against the dollar in major markets.

According to Malam Yahu, a trader in the Wuse Zone 4 market, the EFCC’s operations in Lagos, Port Harcourt, and Kano disrupted market activities, leading to heightened concerns among traders in Abuja.

Abubakar Taura, another trader, corroborated the reports of arrests by security agents and confirmed the prevailing exchange rates.

The President of the Association of Bureau De Change Operators, Aminu Gwadabe, acknowledged the raids, stating that while street traders were the primary targets, some registered BDC operators were also affected. He emphasized the government’s efforts to address illegal practices in the currency market.

Meanwhile, at the parallel market, the naira closed at N1,540 per dollar, marking a 4.05% depreciation compared to the previous day’s rate. The official exchange rate also weakened, closing at N1,520 per dollar.

The recent depreciation is attributed to a shortage of dollars, driven by the repatriation of funds by foreign investors. This decline comes after a period of relative stability in April 2024, which followed interventions by the Central Bank of Nigeria (CBN) aimed at curbing currency speculation.

Economists have highlighted the need for fundamental policies to address FX liquidity challenges, emphasizing the importance of exports and foreign capital inflows in strengthening the naira. They noted that while the CBN has implemented reforms, sustained stability requires a conducive macroeconomic environment.

Industry stakeholders, including manufacturers and chambers of commerce, have expressed concerns over the currency’s volatility, citing its impact on business operations, import costs, and inflation. They called for government intervention to stabilize the naira and create a predictable business environment.

In a related development, data from the Nigerian Exchange Limited revealed a significant increase in foreign outflows from the local bourse in the first quarter of 2023, underscoring the challenges posed by capital flight.

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