Naira depreciates again, loses 0.64% against Dollar at official market despite CBN efforts
In another blow to the Nigerian economy, the naira witnessed a further depreciation against the dollar on Wednesday, trading at ₦1,308.52 to the dollar, marking a 0.64% loss compared to the previous trading day. Data from the FMDQ Exchange, which monitors the Nigerian Autonomous Foreign Exchange Market (NAFEM), revealed the naira’s decline, with a loss of ₦8.37.
The total daily turnover, however, saw an increase to $197.54 million on Wednesday, up from $133.65 million recorded on Tuesday. Meanwhile, at the Investor’s and Exporter’s (I&E) window, the naira fluctuated between ₦1,367 and ₦1,098 against the dollar.
Despite ongoing reforms by the Central Bank of Nigeria (CBN), aimed at stabilizing the forex market and bolstering the naira’s value, the recent depreciation marks a setback after a period of steady appreciation. The CBN’s efforts have been targeted at curbing illicit forex trading activities, with the Economic and Financial Crimes Commission (EFCC) playing a crucial role in this regard.
The EFCC recently made headlines by freezing over 300 accounts linked to illicit forex trading during an interactive meeting with media executives in Abuja. EFCC Chairman, Ola Olukoyede, disclosed the agency’s actions, citing the discovery of schemes beyond the crypto trading platform, Binance, and its system.
According to Olukoyede, nefarious activities were being conducted within the forex market through peer-to-peer (P2P) platforms, posing a significant threat to the stability of the naira. He emphasized that the 300 illicit accounts identified could have led to a rapid devaluation of the naira if left unchecked, undoing the progress made in recent weeks.
The EFCC’s intervention underscores the severity of the challenges facing Nigeria’s forex market and the urgent need for regulatory action to combat illicit activities. While the CBN’s reforms have shown promise in stabilizing the naira, the recent depreciation serves as a stark reminder of the vulnerabilities inherent in the country’s forex ecosystem.
As stakeholders continue to grapple with the complexities of forex regulation and enforcement, the fate of the naira remains uncertain amidst ongoing economic pressures and external factors influencing exchange rate dynamics. The EFCC’s vigilance and swift action against illicit forex trading are essential in safeguarding the integrity of Nigeria’s financial system and restoring confidence in the naira’s stability.
