Naira-Holds Firm At N1500/$ Despite Increased EFCC Measures Against Street-Forex Trading (Details)

On Friday, the value of the naira stood at N1,500 compared to N1,510/$1 on Thursday on the black market. Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira settled at N1,482.8 on Friday, up from N1,485.7 on Thursday.

Crackdown on Street Trading

The Economic and Financial Crimes Commission (EFCC) has intensified its efforts to combat speculation against the weak naira by implementing stronger regulations on Bureau de Change (BDC) and foreign exchange transactions on the black market.

Recent arrests of illegal currency traders in Abuja, Lagos, Kano, and Port Harcourt signal the EFCC’s crackdown on street trading, with over 300 accounts frozen in connection with illegal foreign exchange trading.

The Securities and Exchange Commission (SEC) also plans to collaborate with the EFCC to mitigate forex trading manipulations within the digital space. Blaise Ijebor, head of risk management at the Central Bank of Nigeria (CBN), emphasizes that street forex trading is prohibited.

CBN’s Regulatory Measures

To regulate the BDC sector and safeguard the value of the naira, the CBN has increased the capital requirements for BDCs significantly. Tier one BDCs operating nationwide now require N2 billion in capital, up from N35 million, while tier two BDCs operating in a single state must have N500 million, up from N35 million.

Despite requests from the umbrella group of BDCs for a delay and reduction in the new thresholds, the sector has six months to comply.

Crackdown on Cryptocurrency Trading

The Federal Government’s plan to outlaw cryptocurrency trading between individuals in naira aims to curb volatility in the local currency. This follows the naira’s significant depreciation against the dollar since the liberalization of Nigeria’s FX market last year.

U.S. Dollar Index Performance

Despite a 0.3 percent decline on Friday, closing at 104 index points against major currencies, the dollar index ended the week with a 0.2 percent increase. Encouraging U.S. economic data led to reduced expectations for interest rate reductions, supporting the dollar’s strength despite profit-taking activities.

Published By: Destiny.Jnr