Market News

Nigeria naira gains on black market after raid on FX dealers - REUTERS

AUGUST 05, 2022

By Chijioke Ohuocha and Camillus Eboh

ABUJA, Aug 4 (Reuters) - The Nigerian naira NGNP= pulled back from a record low against the dollar on the parallel market on Thursday after the country's anti-graft agents raided currency operators in Lagos and Abuja, traders said.

The currency recovered to 660 naira per dollar on the unofficial market on Thursday.

Last week it crossed 700 naira to the dollar on the parallel market, where it freely traded, prompting the country's Senate to summon Central Bank of Nigeria (CBN) Governor Godwin Emefiele over the "free fall of the naira".

The central bank on Friday said it was concerned about the value of the naira and is making deliberate efforts to avert a further downward slide in the currency.

The Economic and Financial Crimes Commission (EFCC) raided bureau de change operators on Wednesday, questioning them about their activities, traders said. The anti-graft agents took pictures of currency dealers and collected copies of their identity cards, they said.

Traders said the EFCC agents blamed "artificial dollar scarcity" for naira's woes and accused speculators of buying up available dollars to create artificial scarcity, echoing Governor Emefiele's comments on the currency crisis.

The central bank, bureau de change association and EFCC did not respond to requests for comment.

The naira has fallen to successive record lows on the parallel market due to dollar scarcity since July 2021, when the central bank stopped forex sales to retail currency traders to ease pressure on reserves and support the official market.

The move funnelled demand toward the unofficial market. The currency has been trading within a range NGN= on the official market.

The naira hit a record low of 705 per dollar on the unofficial market last Thursday and had fallen further before EFCC's raid.

Other cross-currencies such as the pounds sterling GBPNGN= were still at a record low on the parallel market.

(Reporting by Chijioke Ohuocha and Camillus Eboh; Editing by Daniel Wallis)

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