Despite the federal government’s clampdown on foreign exchange market speculators, the naira fell further on Tuesday in the parallel market.
Bureau De Change (BDC) hubs were raided in Abuja, Lagos, and Kano, with some operators arrested.
Despite the raids, the naira fell further, with a dollar exchanging for 1,900 in Abuja and Kano and N1,800 in Lagos, while the British pound was traded for N2,250.
According to the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira rose little on the official market, closing at N1,551.24 from N1,574.62.
According to the press report, Nuhu Ribadu, the National Security Adviser, directed operatives of the Nigeria Police Force, the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service (NCS), and the Nigeria Financial Intelligence Unit (NFIU) to crack down on forex market speculators earlier yesterday.
This, he stated, was a coordinated effort to protect Nigeria’s foreign exchange market and combat the actions of domestic and international speculators who operate through various channels.
Ribadu, according to Zakari Mijinyawa, Head, Strategic Communications in the Office of the NSA, stated that the office had to intervene at this time because some individuals and organisations had continued to undermine the Central Bank of Nigeria’s proactive measures to stabilise the foreign exchange market and stimulate economic activity.
However, other experts who talked with our reporters characterized the move as flawed, claiming there are better methods to solve the volatility.
Ribadu stated, “The CBN’s proactive measures to stabilize the foreign exchange market and stimulate economic activity have been commendable.”
“However, the efficiency of these attempts is being hampered by the activities of speculators, both domestic and international, who operate via numerous channels, aggravating the Nigerian Naira’s depreciation and adding to inflation and economic instability.
To relieve pressure on the naira, the EFCC formed a 7,000-man special task force spanning 14 zonal commands to crack down on dollar racketeers.
“Yet, new intelligence reports have indicated persistent criminal activity in Nigeria’s foreign exchange sector. As a result, the ONSA and CBN have decided to work together to combat these transgressions.
“This collaboration would involve a coordinated effort with important law enforcement agencies such as the Nigeria Police Force, the EFCC, the Nigeria Customs Service, and the Nigeria Financial Intelligence Unit (NFIU).
The major goal of this collaboration is to systematically identify, properly investigate, and suitably prosecute people and companies engaged in fraudulent actions in the FX market,” the official stated.
The NSA stated that by using the experience of those four security organizations, the government hoped to deter what he called “malicious practices” in order to protect investors’ interests and foster long-term economic growth.
Yesterday, security personnel raided unlicensed BDC operators in Lagos, Abuja, and Kano in response to an NSA mandate.
Around 10 a.m., EFCC officers raided Allen Avenue in Lagos, arresting approximately five BDC operators.
Many of the unlicensed operators trading on the road fled upon seeing the security personnel.
An operator stated, “They came to our facility today and accused us of being responsible for the increase in foreign exchange. We all had to take to our heels out of dread of being arrested.”
Another said five of his coworkers were arrested during the operation, and that “many of us have run away now and we are monitoring the situation.”
An operator who did not disclose his identity stated that even though no EFCC operatives visited the market to crack down on currency speculators, the dollar’s price continued to rise.
He went on to say, “Today, the dollar has risen to N1,870 from N1,750 it was sold on Monday.”
When our journalists visited the location, normal trading operations were taking place.
Bureau De Change operators in Abuja reported that EFCC officers stormed the renowned Zone 4 commercial district.
Some of the operators who spoke with Kluemedia reporters stated that the operatives arrived in large numbers on Monday.
Another BDC operator, stated: “We were simply on our own when we witnessed EFCC operatives in over three Hilux vans rush our surroundings at Zone 4, and the next thing we saw was them detaining several of our colleagues. They put them in their vans and drove away.
“What I was told later was that they were acting on a tipoff that some people were hoarding dollars and that was why they came and effected arrests.”