NAFEM: Forex Inflow Rises By 11.7% As Naira Weakens To N1,571/$

Inflow at the Nigeria Autonomous Foreign Exchange market (NAFEM) soared yesterday by 11.7 per cent to $192.25 million as the value of the naira weakened marginally to N1,571.31. This is as the clamp down on speculators at both the parallel market and on crypto trading platforms saw the naira firm up on the streets.

At the end of trading activities on Thursday at the official market, the value of the naira closed weaker compared to N1,542.58 to the dollar on Wednesday.

This shows a 1.9 per cent depreciation during the day.

Inflow further rose to $192.25 million compared to $172.14 million recorded on Wednesday with trading consummated between N1,300 andN1,851 too the dollar.

Compared to N1,574.62 that it closed at that the end of trading on Monday, the value of the currency is still stronger although it was weaker than N1,537.96 to the dollar which it closed at the end of trading last week.

Experts and stakeholders who spoke to LEADERSHIP yesterday offered divergent views on the activities at NAFEM. While an economist, James Audu, told LEADERSHIP Thursday night that there was the need for more disclosure on who bought what and who sold what on the NAFEM platform, the Managing Director and Chief Executive of Arthur Steven Asset Management Limited, Mr Olatunde Amolegbe, had a different view.

Commenting on the day’s trading, Amolegbe said that the pricing at the NAFEM is driven by the forces of demand and supply, adding that speculators do not participate in the official market. He said that there was no way manipulation could happen in the open market because the process would only move to the dictates of supply and demand.

He however commended the move of the government as well as the Central Bank of Nigeria (CBN) to curb the activities of speculators, saying it would ensure that the volatility of the value of the naira as seen on the streets in recent times would be halted.

He said, “The idea of trying to curb trading on Binance and other crypto platforms is a good move to curb short-term instability, although it may not do much to curb long-term instability. People playing games online and trading the currency for their personal benefit without any economic value to the country has to stop, and I think that should not have happened in the first place.

“There was no reason to have allowed the crypto people back into the market. Because it was clear that we have forex shortage, and when that happens, you do not allow multiple people into the market. You have to ensure that the people in the market are those who actually need it to add economic value.”

Also, a Binance user, Godwin Igwonu, told LEADERSHIP that there is no regulation on the pricing on the platforms as anyone quotes any amount, and there are multiple prices quoted by users. He acknowledged that some of the prices quoted do not reflect the value of the naira, adding that the prices quoted on the crypto platforms influence the prices that street traders quote.

At the end of trading on Thursday, the value of the naira had gained strength on the street, with currency traders quoting N1,880 to the dollar compared to N1,900, which it sold on Wednesday.

On Thursday, the Naira was trading at N1680 per dollar on Binance platform, LEADERSHIP findings revealed. This is even as the government continued to clamp down on crypto trading platform, to strengthen the naira against the dollar.

Recall that Binance had confirmed that its website had been blocked while directing its user to mobile app, which is still active.

Binance, which disclosed this via mail sent to its users on Thursday, affirmed that the mobile app could be accessed via VPN.

It said, “We are aware that some users are experiencing issues accessing binance.com, along with other platforms in the industry. Only users attempting to access the website are impacted, although the app is currently available.”

Meanwhile, at the end of trading on Thursday, at the parallel market, the value of the naira had gained strength on the street with currency traders quoting N1,880 to the dollar compared to N1,900 which it sold on Wednesday.

In Abuja, the officers of the Economic and Financial Crime Commission, EFCC, have shut down illegal Bureau De Change operators in Wuse Zone 4 Abuja on Thursday.

A Bureau De Change operator, Hashim Tahir, disclosed  this to LEADERSHIP on Thursday. According to him, the BDC operation was closed following the raid of EFCC operatives. He noted that most of the BDC operators were not buying or selling foreign exchange at Wuse Zone 4 on Thursday.

Munir Ahmed, another BDC operator, disclosed on Thursday that he was no longer buying or selling USD due to the uncertainty in the FX market.

At the parallel FX market, the naira traded between N1,500 and N1750 per US dollar on Thursday, from N1,970 the previous day.