The naira continued its downward trend against the United States dollar at the official and parallel foreign exchange markets on Monday, much to the despair of citizens.
This was as the parallel segment of the foreign exchange market recorded a new all-time low for the naira which depreciated to N1,730/$.
It was learnt that the development led operatives of the Economic and Financial Crimes Commission to raid some Bureau De Change operators’ outlets in Abuja on Monday, arresting currency traders suspected to be speculating against the naira.
This represents N60 or 3.59 per cent drop from N1,670/$ recorded at the close of trade at the black market on Friday.
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.
Another operator, Ibrahim Yahu, who is based at the Abuja airport, said the dollar was sold at the rate of N1,725, adding that there was high demand for the greenback throughout the day.
At the official window, the naira depreciated by 2.65 per cent to N1,574.62 on Monday from N1,537.96/$ it was sold on Friday. Dollars sales to the market also decreased to $66.43m.
Analysts believe the development may be reminiscent of last week’s trading at the Nigerian Autonomous Foreign Exchange which started at an all-time low of N1,534/$ on Monday, before moving to N1,499/$ on Tuesday. The naira however fell to N1,503.38/$ at the close of trading on Wednesday before recovering to N1,498/$ at the close of trading activities on Thursday. It ended 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.”
Our correspondent 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, told our correspondent 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.”
However, as of the press time on Monday, our correspondent could not independently verify the BDC operators’ arrest from the EFCC.
SOURCE: PUNCHNG
