According to Newsmen, the naira has recovered 20.8 percent to 720/dollar in the parallel market.
The move happened two weeks after the local currency was under tremendous pressure on the underground market following the Federal Government’s announcement to redesign the naira.
The naira, which had been falling steadily against the US dollar all week, hit an all-time low of 910/dollar last weekend.
However, the currency began a recovery against the US dollar on Monday, following a week-long crackdown on foreign exchange dealers in Abuja, Lagos, Kano, and other major cities by Economic and Financial Crimes Commission personnel.
What Multiple Exchange Rates Have Done To Naira – Moghalu
Over 90 Bureau De Change operators were arrested across the country by EFCC officers on suspicion of currency hoarding and assisting politically exposed Nigerians and other criminal elements in money laundering.
The naira, which was bought and exchanged on the streets of Lagos and Abuja between 735 and 745 per dollar two weeks ago, began a fast decline quickly following the Federal Government’s decision to revamp the local currency.
However, the naira recovered on Monday, trading between 850 and 860 per dollar. On Tuesday and Wednesday, the national currency climbed dramatically and steadily, closing at 720/dollar on Thursday.
Financial analysts and FX dealers who spoke with our reporters ascribed the development to market sentiment and the efforts of the EFCC personnel.
The crackdown on forex dealers was alleged to have forced some BDCs into hiding, causing many politically exposed individuals and currency speculators to reduce their demand for the greenback.
The dollar was in high demand on the parallel market in Lagos, Abuja, and other locations.
Today’s Dollar To Naira Exchange Rate, 15 June 2022
Mustafa Abdullahi, a BDC operator at Lagos’ Murtala Muhammed Airport, told our correspondents on Thursday that he bought local currency for 715 dollars and sold it for 720 dollars.
He claimed that some BDCs had gone into hiding as a result of the EFCC crackdown, and that demand for the greenback had plummeted dramatically.
“Many of our people have lost hundreds of millions of naira due to the fall. Many of them bought the dollar when it was over N800. Now the US currency has started falling and they are losing several millions. I personally lost millions of naira.”
Another BDC operator at the Lagos airport, Seriki Muhammed, said he acquired the greenback for 717/dollar and sold it for 721/dollar on Tuesday.
Muhammed told Newsmen that some BDCs were licking their wounds after purchasing over $500,000 at around $820 per dollar in expectation of further naira depreciation.
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“Unless the dollar rises again, we’re in terrible trouble.” “Many of our people bought so much dollar in the hope that it would rise much higher,” he informed one of our journalists.
Gambo Bello, a currency dealer on Allen Avenue in Ikeja, Lagos, said he was buying and selling US dollars for N715 and N720.
Abubakar Hamid, an Abuja-based BDC operator, informed one of our correspondents that he purchased the US currency for N716 and sold it for N719.
Also at Lagos Island, Zakari Mohammed, a BDC operator, told our correspondent that he was buying and selling at N718/dollar and N722/dollar.
However, Aminu Gwadabe, President of the Association of BDC Operators of Nigeria, stated that market sentiment and news of the naira redesign pushed the market in the last two weeks.
He said that the naira’s resurgence had caused several currency speculators to lose millions of naira.
Many currency traders, he claims, were unaware that the naira would recover so quickly.
9 March 2022: See How Much Naira Exchange To Dollar Today
He said, “I can say the surveillance by the EFCC and other factors affected the market. However, I can say that some global factors also affected the market aside from the local issues in Nigeria. Don’t forget that countries like Saudi Arabia, Russia and China are taking some steps that are currently affecting the dominance of the dollar.
“But locally, I can say certain sentiments made the naira rebound and these have led many speculators to lose millions of naira. Many took a position at N800/dollar and now they are worried the currency is now N720/dollar. This was why there was some resistance in the market today with many BDCs not willing to sell their dollar at a lower amount. People who kept the greenback are now bringing it out because of certain market sentiments.”
Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, remarked that the rush for dollars has subsided following the unveiling of the redesigned naira.
According to him, the naira may have recovered as a result of this downturn.
9 June 2022: See How Much Naira Exchange To Dollar Today
He said, “It is a very volatile situation. The immediate reaction to that pronouncement triggered some rush to convert to dollars. That round of reaction is already beginning to die down. That’s a possible factor. Once that initial rush has subsided, it is possible that the pressure on the dollar reduced.”
He also mentioned that the recent rumors concerning certain expired dollar bills may have contributed to the naira’s recovery.
However, Yusuf noted that there were still many unknowns and that the situation remained dangerous.
He also stated that the recent arrest of certain BDC operators did not likely contribute to the comeback.
Yusuf also mentioned that a number of speculators may have been cautious and aware of the unpredictable scenario, which may have stopped them from incurring losses.
He did, however, say that while speculating, one sometimes loses and sometimes wins.
14 June 2022: See How Much Naira Exchange To Dollar Today
Dr Aliyu Ilias, a development economist, believes the naira would continue to fall, especially with the upcoming election.
He also stated that the economy was not yet stable and that the recovery might not last long.
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