The Nigerian naira continued its downward spiral against the US dollar on Monday, hitting a new low and sending shockwaves through the populace.
In response, the Economic and Financial Crimes Commission (EFCC) took swift action, raiding Bureau De Change (BDC) operators’ outlets in Abuja suspected of exacerbating the currency’s decline.
At the parallel foreign exchange market, the naira plummeted to an unprecedented N1,730/$, marking a drop from the previous N1,670/$. This trend, fueled by intense demand for dollars by speculators and individuals traveling for various purposes, has placed immense pressure on the currency.
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“Customers are demanding the dollars so much and it is affecting the market rates,” remarked Abubakar Taura, a black market trader based in Wuse, Abuja.
The situation was no different at the official window, where the naira depreciated by 2.65%, reaching N1,574.62 on Monday. Analysts fear a widening gap between official and parallel market rates, signaling concerns about illicit activities such as round-tripping.
Meanwhile, the EFCC’s crackdown on BDC operators underscores the gravity of the situation. Over 50 individuals were reportedly detained in Wuse Zone 4, Abuja, as part of efforts to curb illegal forex trading allegedly contributing to the naira’s decline.
Malam Ibrahim, a Bureau De Change operator, confirmed the raids, stating, “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.”
The EFCC’s intervention comes amidst a backdrop of efforts by the Central Bank of Nigeria to stabilize the forex market through various policy interventions. However, the persistent depreciation of the naira highlights the challenges facing the country’s economy.
As the nation grapples with these economic uncertainties, the fate of the naira remains uncertain, with stakeholders closely monitoring developments in the forex market for signs of stability.
While the EFCC’s actions may offer temporary respite, the underlying factors driving the naira’s decline require a comprehensive and sustainable solution to restore confidence in the currency and the economy as a whole.