Naira Falls at Official Market Amid Intense Fight Against Forex Traders

The Nigerian Naira recorded a loss against the US Dollar in the official market, the Nigerian Autonomous Foreign Exchange Market (NAFEM), on Tuesday, May 7 amid a renewed clampdown on foreign exchange (FX) traders in the black market.

The value of the local currency weakened during the session against the greenback in the spot market by 4.6 per cent or N62.36 to sell for N1,416.57/$1, in contrast to the previous day’s N1,354.21/$1, according to data obtained from the FMDQ Securities Exchange.

It was a similar story for the Nigerian currency at NAFEM yesterday as it shrank against the Pound Sterling by N4.61 to quote at N1,740.22/£1 compared with Monday’s closing rate of N1,735.61/£1 and against the Euro, it weakened by N2.33 to trade at N1,491.48/€1 versus N1,489.15/€1.

The forex turnover at the market yesterday increased by 89.5 per cent or $75.94 million to $160.77 million from the $84.83 million executed at the last session.

The Naira is now approaching recent drop zones after appreciating to a level where it was briefly touted as the best-performing currency globally, bolstered by the forex and strategic reforms of the Central Bank of Nigeria (CBN).

Officials of the Economic and Financial Crimes Commission (EFCC) carried out raids on unregistered currency sellers as it continued a staunch clampdown on street trading, which it believes is causing the Naira’s instability. The raid comes months after the central bank banned street trading of FX and tightened regulations for Bureau De Change (BDC) operators.

Business Post reported that in Lagos from Yaba to the Olugbede Model Market in Egbeda to Gbagada and Ikeja, traders got wind of the raids and quickly went into hiding, putting pressure on the domestic currency in the parallel market on Tuesday. It lost N10 against the US Dollar during the session to close at N1,445/$1 compared with the previous day’s N1,435/$1.

In a different setting, the Securities Exchange Commission (SEC) mulled bending the hands of crypto exchanges to delist the Naira from Peer-to-Peer (P2P) trading pairs, confirming initial plans revealed by the EFCC.

In the digital currency market yesterday, Solana (SOL) lost 5.1 per cent to trade at $146.25, Dogecoin (DOGE) slumped by 4.7 per cent to $0.1485, Ripple (XRP) declined by 3.2 per cent to $0.5183, Bitcoin (BTC) fell by 2.2 per cent to $62,219.97, Ethereum (ETH) lost 2.1 per cent to quote at $3,001.57, Cardano (ADA) waned by 1.8 per cent to $0.4401, Binance Coin (BNB) dropped 1.2 per cent to trade at $581.35, and Litecoin (LTC) plunged by 0.9 per cent to $79.58, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

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