By Dipo Olowookere
Representatives of Bureaux de Change (BDC) operators in the Federal Capital Territory (FCT) Abuja have admitted that speculative activities of some of its members caused the crumbling of the Nigerian Naira to more than N700 to a Dollar at the parallel market segment of the foreign exchange (forex) market recently.
Last month, the indigenous legal tender sank to its lowest level by exchanging to the United States Dollar at N715/$1 in the unofficial FX segment.
This followed statements made by the governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, in Abuja after the Monetary Policy Committee (MPC) meeting.
After announcing the raising of the baseline interest rate in the country to 14.00 per cent, the apex bank chief said security operatives would begin to go after people withdrawing their Naira from banks with the purpose of hedging against the Dollar.
This triggered a panic in the financial system and investors and others started to liquidate their Naira holdings to buy the Dollar. With the country experiencing a shortage in the supply of Dollars, the local currency came under pressure, falling to an all-time low.
Worried that the Naira may eventually crumble, the Senate summoned Mr Emefiele and it was after this action of the lawmakers that officials of the Economic and Financial Crimes Commission (EFCC) began to raid some currency hawkers across major cities of the federation.
The arrest of FX traders on the streets eased the pressure on the local currency and last week, the Nigerian currency gained against the greenback and was sold at N638/$1 at a point.
On Friday, some Abuja BDC operators held a meeting with the chairman of the EFCC, Mr Abdulrasheed Bawa, in Abuja and during the gathering, they admitted that some speculators among them were behind the crashing of the Naira at the black market.
However, they promised to work in partnership with the agency to clean up the market, expressing optimism that the Naira’s rebound, which began after the EFCC’s intervention a few days ago, may eventually see the currency return to its pre-speculation value.
On his part, Mr Bawa said his meeting with forex traders was part of ongoing efforts to check the rising incidence of FX speculation which has brought pressure on the value of the Naira.
The EFCC boss said he wants to fashion out a collaborative stakeholders’ response to brazen forex speculation, especially in the parallel market which is hurting the country’s monetary policy by instigating a run on the value of the Naira.
According to him, similar meetings are planned for other BDC operators in the major commercial cities across Nigeria as well as with key players, regulators and operators of the Nigerian financial sector.
