Dollar Crashes against Naira on Binance as CBN Orders BDCs to Sell USD to Nigerians at Cheap Rate

• The Nigerian currency, the naira, gained close to N200 against the US dollar on the cryptocurrency platform Binance
• The dollar crashed on the platform, selling at N1,415 per dollar as against N1,606 per dollar it traded the previous day
• The development follows a statement by the CBN governor that about $26 billion passed through Binance Nigeria in one year

Legit.ng’s Pascal Oparada has reported Tech, Energy, Stocks, Investment and the Economy for over a decade.

The US dollar has crashed against the Nigerian currency, the naira, at the crypto peer-to-peer platform, Binance.

Data from the platform showed that the dollar crashed at around 8 am on Wednesday, February 28, 2024, trading as low as N1,415 per dollar from the N1,606 per dollar it traded in the last 24 hours.

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Traders embark on sell-offs

Some traders on the platform reportedly quoted above N1,500 per dollar as trading intensified.

Meanwhile, the governor of the Central Bank of Nigeria, Olayemi Cardoso, said on Tuesday, February 27, 2024, that the largest cryptocurrency platform, Binance Nigeria, processed over $26 billion.

Cardoso said the apex bank was collaborating with other government agencies, such as the EFCC, the police, and the Office of the National Security Adviser, to address the issue of currency manipulation.

He said:

“We are concerned that certain practices indicate illicit flows going through several of these entities and suspicious flows at best. In the case of Binance, $26 billion has passed through Binance Nigeria in the last year alone from sources and users we cannot adequately identify."

According to the CBN boss, the bank is determined to take charge of the market and not let others manipulate the forex market.

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Analysts say Cardoso’s statement may have sparked sell-offs on Binance as the naira strengthened against the US dollar on the platform.

“What we are seeing currently is massive sell-offs in anticipation of another clampdown by CBN,” Samuel Abu, a crypto trader, told Legit.ng.

Abu stated that the plans to clamp down on crypto exchanges and platforms in Nigeria have unsettled traders, leading to the naira gaining against the dollar.

“Traders are offloading their assets across the country. I am not sure it has anything to do with CBN’s statement. In other places, the situation is stable as there are no immediate threats to gains,” Abu said.

FG orders telecom firms to block Binance

The development follows an order by the Nigerian government to telecommunication companies in Nigeria to block Binance, as the platform was reportedly responsible for the continued collapse of the local currency.

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Reports say that bank officials have blamed Binance as a significant source of speculation against the naira, leading to a clampdown on Binance operations in Nigeria.

Binance responded to the statement by Nigerian authorities, saying it had adjusted some of its trading activities by Nigerians.

The development came as the naira crashed in the official foreign exchange market, trading at N1,615.94 per dollar on Tuesday, February 27, 2024, as against the N1,600 it traded on Monday, February 26, 2024.

The naira recorded an intraday high of N1,778 per dollar and an intraday low of N1,300.

However, the CBN has instructed Bureau de Change (BDC) operators in Nigeria to sell Forex to Nigerians at 1% of the purchase rate after it resumed weekly sales of FX to the operators.

The apex bank said in a statement that it will begin the sales of $20,000 weekly to 785 BDC operators at the rate of N1,301 per dollar, which they will resell at 1% higher than the purchase price.

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CBN resumes sales of dollars to BDCs, sets dollar exchange rate pricing limit

Naira's free fall against the US dollar continues

Legit.ng reported that the naira recorded a poor performance against the US dollar in the official foreign exchange market on Tuesday, February 27, 2024.

Data from FMDQ securities shows that the Nigerian currency in the Nigerian Autonomous Foreign Exchange Market (NAFEM) weakened to N1,615.94/$1.

Tuesday's rate is an N33.00 or 2.09% depreciation against the United States Dollar compared with the previous day’s N1,582.94/$1.

Source: Legit.ng