The Naira exhibited a positive trend against the US Dollar in the official market, concluding the week at N1,548.25/$1, an improvement from the previous day’s rate of N1,595.11/$1.
This uptick occurred amidst sustained demand pressures exerting a downward influence on the currency’s value.
Simultaneously, there was a notable increase in forex turnover, rising by 36.32% to reach $296 million. This surge in trading activity reflects heightened engagement in the foreign exchange market.
Decisive measures against suspected illicit activities
The recent appreciation coincides with the Central Bank of Nigeria’s (CBN) decisive measures against suspected illicit activities involving Bureau De Change (BDC) operators and Binance, a cryptocurrency trading platform.
Furthermore, the Federal Government imposed a significant fine of $10 billion on Binance, alleging its involvement in exacerbating Nigeria’s forex challenges.
To narrow the widening gap in the exchange rate, the government plans to allocate $20,000 to each eligible Bureau De Change (BDC) operator nationwide.
These initiatives are anticipated to infuse much-needed liquidity into the market, thereby aiding in stabilizing the value of the Naira.
According to data from the NAFEM (Nigeria Autonomous Foreign Exchange Market), where forex is officially traded, the domestic currency appreciated by 3.03% at the end of the week, closing at N1,548.25 to a dollar at the close of business.
More insights
- This represents an N46.86 gain or a 3.03% increase in the local currency compared to the N1,595.11 closed on Thursday.
- The intraday high recorded N1652.40/$1, while the intraday low was N1400/$1, representing spread of N252.4/$1.
- According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $296,00 million, representing a 36.32% increase compared to the previous day.
- However, the naira depreciated at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1,530/$1, a decrease of 2.61% against N1,490 it closed the previous day,
- Meanwhile, the Great British Pound (GBP) appreciated by 4.40% to close at £1/N1,820, against £1/N1,900 recorded the previous day.
- Additionally, the Naira against the Euro appreciated by 1.78%, closing at N1690/EUR1 compared to N1720/EUR1 also reported the previous day.
Nairametrics reported that the Federal Government has slammed a $10 billion fine on crypto trading platform, Binance, over allegations of influencing the country’s forex crisis.
The special adviser to President Bola Tinubu on information and strategy, Bayo Onanuga, disclosed this Friday morning in an interview with the BBC.
According to Onanuga, Binance profited substantially from its “illegal transactions” in Nigeria while the nation suffered huge losses.
Onanuga claimed that Binance is not registered in Nigeria and has no presence there. He alleged that people used the platform to fix dollar-naira rates arbitrarily; a practice he said negatively impacted the value of the local currency.
He explained further that the Binance team was already cooperating with the Nigerian government by providing useful information, and had already suspended naira-related transactions on the platform.