Honeymoon ends as currency rates falls globally

On Wednesday, the official and black markets saw a decrease in the value of the Nigerian naira relative to the US dollar. This decline has significantly reversed the modest boost seen the previous week.

The official forex trading platform, NAFEM, released data on Wednesday showing that the local currency depreciated by 0.55% to close at N874.71 to the dollar.

There was a decrease of N4.8, or 0.55%, in local currency from the closing rate of N869.91 on Tuesday.

There was a notable difference of N352.50/$1, with the intraday high being N1097.50/$1 and the intraday low being N745.00/$1.

The forex turnover at the end of trade was $223.52 million, a significant rise of 60.1% from the previous day, according to data from the official NAFEM window.

Similarly, the value of the naira, the currency of Nigeria, dropped on the unauthorized parallel forex market. Exchange rates declined; N1130/$1 was quoted, but peer-to-peer dealers mentioned about N1110.10/$1.

Notice to Speculators: The Nigerian Association of Bureau de Change Operators cautions those trading in naira against the currency to proceed with caution and wisdom.

In a warning statement, ABCON President Mr. Aminu Gwadabe stressed that the Central Bank of Nigeria is ready to take action against currency speculators, which might have negative repercussions for them.

• “What is happening in the market and the continuous naira rebounds are the manifestations of the CBN double-edged sword measures of dollar liquidity injection and naira mopping through the instrumentality of interest rates hikes.  
• “It is a good development as it is the greatest risk to speculate, hoard, and substitute naira for other currencies,” Gwadabe declared.  

The Nigerian currency, the naira, has experienced a reversal in its previous depreciation trend observed earlier this year. This positive change can be attributed to the Central Bank of Nigeria’s efforts to address the backlog of foreign exchange demand in banks.

• “As we continue to observe developments, there is the need for a caution in attacking the naira, as it all appears that the CBN has gotten the arsenal and the logic to continue to enshrine the success recorded,” ABCON added.  
• The association noted that there had been “panic selling as against panic buying.”  

The Bureau De Change (BDC) operators have requested that the apex bank provide further clarifications and implement their recommendations to incorporate them into the foreign exchange market.

Mr. Gwadabe stated that this measure would facilitate the ability of Bureau De Change (BDCs) to effectively fulfill their responsibilities in meeting the demands of the essential retail sector. He emphasized that BDCs significantly impact the implementation of the Central Bank’s foreign exchange rate policy, which aims to maintain stability and reduce discrepancies in the overall market.

• “The BDCs are necessary for the demand measures of the apex bank transaction monitoring mechanism and client’s utilization with correcting and moderating potential,” he said.