In an effort to stop currency manipulations, the Economic and Financial Crimes Commission (EFCC) decided to conduct raids on Bureaux De Change (BDC) operators in Nigeria’s major cities. However, this move appears to be counterproductive.
The Central Bank of Nigeria (CBN) has previously announced that it would alter the Naira notes in order to combat inflation and stop counterfeiting.
After the CBN’s revelation, the value of the local currency to the US Dollar plunged and to control this, the EFCC was deployed to go after BDC operators.
This has further worsened the situation as the panic caused by the raids has weakened the Nigerian currency.
At the black market on Thursday, the Naira was nearing N900/$1, selling at N880/$1 compared with the N850/$1 it was transacted on Wednesday.
It was gathered that those who stashed the Naira notes at home are desperate to convert their funds to Dollars and are offering outrageous amounts for this, giving forex traders the freedom to manipulate the rates.
The black market on Thursday, the Naira was nearing N900/$1, selling at N880/$1 compared with the N850/$1 it was transacted on Wednesday.
“Some are willing to change the Naira at N1,200 or N1,500 to a Dollar,” an FX seller in Lagos informed this newspaper, noting that “this is driving prices high.”
“The problem is we do not have Dollars, and those who have want to delay selling them because they believe the price would still jump above the current rate,” another trader, who simply identified himself as Shehu, said.