Naira Reclaims Value on Black Market, Official Window
Naira

Naira Reclaims Value on Black Market, Official Window

While questions bothering whether nationalism should precede capitalism in daily economic activities remain unanswered, the Nigeria local currency trades stronger against the United States dollar on Thursday, closing at N660 in the black market.

Recalled that last week, what some market observers call artificial demand pressures had mounted on the local currency at the unofficial market,  which pushed the exchange rate above N715 to a United States (US) dollar.

The gain which was outside forces of real demand and supply was corrected by the Economic and Financial Crimes Commission (EFCC) visitation to bureau de change operators on Wednesday, questioning them about their activities.

In July 2021, the Central Bank of Nigeria (CBN), after derecognizing bureau de change (BDCs) operators’ activities has not been able to stem the local currency from free falling.  READ: CBN Stops Dollar Sales to Bureau de Change Operators

But political capitalists leading the country would require more dollars in their pockets to play their dirty game ahead of 2023 election.

History has however proven that the naira would be weakened due to uneconomic demand for greenback to satisfy Nigeria’s power mongers – representing one percentile of the most populous nation in Africa- goals.

Some market analysts told MarketForces Africa that there are two things that explained the recent decline in the value of the local currency. The first is the government’s low foreign currencies inflow and of course pre-election demand for the greenback.

MarketForces Africa gathered that at the same time when the exchange rate was making a galloping movement in the black market, other major currencies were steadied. At the Investors, Exporters foreign exchange window, the Nigerian local currency also gained against the dollar exchanging at N428.12.

The figure represented an increase of 0.25 per cent compared with N429.20 it exchanged for the dollar on Wednesday. The open indicative rate closed at N428. 33 to the dollar on Thursday.

An exchange rate of N444 to the dollar was the highest rate recorded within the day’s trading before it settled at N428.12. The naira sold for as low as N415 to the dollar within the day’s trading.

Trading data shows that a total of 110.22 million dollars was traded in foreign exchange at the official Investors and Exporters’ window on Thursday.

If possible, Ban BDCs as Business in Nigeria

Sanity returns to the black market for buying and selling foreign currencies after anti-grafts agent EFCC raided operators due to an artificial surge in the exchange rate.

Though, extreme, a ban on bureau de change operators could save the Nigerian naira from a large volume of foreign exchange that cannot really be accounted for despite scarcity. #Naira Reclaims Value on Black Market, Official Window