Economy
EXPLAINER: Real Reason for the Recent Sudden Rise in Naira to Dollar Rate at P2P
By Dipo Olowookere
On Friday, a few cryptocurrency exchange platforms like Kucoin, Bybit and others were in the news, especially on X, formerly known as Twitter, where they trended as a result of a sharp rise in the Naira to Dollar exchange rate.
Some persons were scared that the gains recorded recently by the Naira may begin to erode and began to call for the heads of these platforms like Binance, which was forced to stop its operations in Nigeria because of allegations of currency manipulation.
The company, Binance, and two of its employees have still not been cleared of the issues they have with the Nigerian government, which has arraigned them before a federal high court.
Yesterday, many claimed that some forex manipulators have rushed to the other crypto exchange apps to begin to fight back, blaming them for the recent fall in the value of the Naira in the parallel market.
Business Post reports that while the Nigerian Naira has witnessed a decline in its value against the US Dollar, not much has happened in the black market.
Though on Friday, the Naira lost 1.4 per cent or N15.91 to trade at N1,169.99/$1 compared with the previous day’s rate of N1.154.08/$1, and in the parallel market, it weakened by N30 against the Dollar to quote at N1,150/$1, in contrast to the preceding day’s exchange rate of N1,120/$1.
As earlier stated, the decline in the local currency was blamed on the trading of cryptocurrencies by some people, but this is entirely not true.
“You claimed that the Naira’s fall has nothing to do with trading cryptocurrencies, but the Naira has appreciated from N1,900 to N950 to the Dollar since FG banned Binance.
“Oga NSA (National Security Adviser Nuhu Ribadu), what you did for Binance, do for Bybit, Kucoin, and OKX; they moved from Binance to these platforms,” one of the commenters wrote.
Another wrote, “Since Wednesday, the Dollar has started to increase again at BDC. Here is why, the emergency lovers of Binance are back speculating on other P2P (peer-to-peer). They will keep adding N50, N50 every day until they take it back to N2,500, which was their initial plan and recoup their loss. CBN (Central Bank of Nigeria) act now.”
“On this issue, I reached out to a source in the relevant security agency and I was reliably informed that it has been flagged as imminent danger and it’s being looked into.
“I am told that they (security agency) may have to expend their hands to them, just like they did to Binance.
“I am told that the NSA (Nuhu Ribadu) has a keen interest in currency manipulation activities as a means of economic sabotage. This is all I am allowed to say for now,” another stated.
However, Business Post can say that the recent weakening of the Naira may have not been entirely caused by manipulators.
For those in the crypto landscape, who trade digital currencies with USDT, which is pegged at the Dollar rate, the recent rise in the value of the US currency against its Nigerian counterpart may have been caused by the Bitcoin halving, which happened on Friday.
Yesterday, Bitcoin (BTC), which is the world’s largest cryptocurrency, completed its fourth ever “halving,” a phenomenon that happens roughly every four years.
It is always anticipated that the value of this digital coin will increase after the halving and the quest to be part of it triggered the demand for USDT and the rise in the exchange rate at these cryptocurrency exchange platforms.
Crypto traders in Nigeria on these platforms had to cough out more Naira to buy the USDT, which was already in high demand because of the BTC halving.
Now that the process has ended, you should expect to see a downward trend in the price of USDT or Dollar in the P2P market in the coming days.
For further clarification, please hit the comment section below.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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