Normalcy seems to be returning to the unofficial segment of the foreign exchange (forex) market in Nigeria because the Naira is trading stronger against the United States Dollar at the moment.
About two weeks ago, the Naira started a free-fall in the parallel market after the Governor of the Central Bank of Nigeria (CBN) said security operatives would go after those converting the local currency to hard currencies.
His remarks, which were made after the Monetary Policy Committee (MPC meeting in Abuja, sent a panic signal into the financial system, sinking the Naira to an all-time low of N715/$1.
However, calm has returned to the market as the Nigerian Naira traded on Monday after at the black market at N680/$1, according to data obtained by Business Post from the various FX traders this reporter interacted with in Lagos.
It was observed that on the buy side, the Dollar is being bought from customers at N670/$1 and it is with caution as most forex traders are scared of biting their fingers in regrets.
“Walahi, I am not willing to buy the Dollar beyond N670/$1 because I don’t know if it will further go down. The ones I bought at N700/$1 and N690/$1 last week thinking it would further go up has made me lose some money and I don’t want to lose more,” one of the forex hawkers at the Alade Market in Ikeja, Lagos, who identified himself as Abdullahi, told this newspaper.
At the Olugbede Model Market in Egbeda, also in Lagos, another FX trader, Adamu Isa, said buying the Dollar is with caution at the moment because nobody knows what will happens next.
“I have stopped buying Dollars at the moment, I only sell and it is for N680/$1. I can manage to buy at N690/$1 but it won’t be many,” he said.
Business Post further learned that more forex traders were apprehended by securities operatives for alleged currency speculation.
According to information gathered, some were arrested at the Lagos airport and there are indications that this action may affect the value of the Naira in the coming days and currency hawkers would likely fight back and create an artificial scarcity, which would put the Naira into another round of pressure.
Last week, after the Senate summoned Mr Emefiele, officials of the Economic and Financial Crimes Commission (EFCC) raided some bureaux de change (BDC) operators in Abuja.
Similar actions were taken across major cities of the federation, resulting in the local currency gaining weight against its American counterpart in the unauthorised FX market.
This is not the first time forex traders are being hunted by security officials as in 2016, the EFCC went after BDCs in a bid to clamp down on their operations.