Falling Naira: EFCC Goes After Forex Traders in Abuja

By Dipo Olowookere

Activities of some currency traders in Abuja were on Friday disrupted by officials of the Economic and Financial Crimes Commission (EFCC).

It was alleged that the foreign exchange (forex) traders were mopping up hard currencies, especially the Dollar, in circulation in a bid to create artificial scarcity for the purpose of selling at higher rates later.

Currency speculators had taken over the local FX market in the past few days and this action has weakened the domestic currency to different all-time lows.

On Thursday, the value of the Nigerian currency against the United States currency depleted to N715/$1 in the parallel market as a result of scarcity of the latter.

This week, after the exchange rate broke the N700/$1 ceiling, the Senate summoned the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, to explain actions he was taking to save the local currency from a total collapse.

Today, according to reports, operatives of the EFCC invaded a hub of Bureaux De Change (BDC) operators in the country’s capital, precisely in the Wuse 4 area of the city.

Nigeria operates more than one exchange rate regime and at the official market, the Naira is around N430/$1 but in the unofficial space, it sells above N700/$1. This market segment is seen by some as the authentic platform to get the true value of the Nigerian Naira because it is controlled by market forces unlike in the Investors and Exporters (I&E) window, which is under the control of the CBN.

Last year, the apex bank stopped the sale of FX to BDCs, directing customers to commercial banks. However, many forex users find it difficult to access foreign currencies and have had to rely on the black market to complete their transactions abroad.

BDC operators, under the aegis of the Association of Bureaux De Change Operators of Nigeria (ABCON), have severally appealed to the central bank to rescind its decision on the stoppage of forex sales to them so as to help restore the confidence of the indigenous currency.