Nigerians Identify 2 New Platforms as Threat to Naira, Ask FG to Close Them Quickly
- Nigerian currency has depreciated in the official and unofficial foreign exchange markets over the past few days
- Reports claim this is due to the re-emergence of currency speculators using two cryptocurrency platforms
- The Nigerian government recently clamped down on Binance operations in Nigeria and dragged its executives to court
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Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The US dollar has improved against the Nigerian currency in the official and unofficial markets in recent days, raising concerns.
On Friday, April 19, 2024, the naira depreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 1.4% or N15.91 to trade at N1,169.99/$1 compared with the previous day's rate of N1.154.08/$1.
Source: Getty Images
Friday's rate marks the third consecutive trading day of losses for the naira in the official markets.
It was the same performance for the naira in the unofficial markets, as it weakened by N30 against the dollar, quoting at N1,150/$1, in contrast to the previous day’s exchange rate of N1,120/$1.
The naira's poor performance has raised eyebrows, especially considering its recent strong performance in both official and unofficial markets, which positioned it as one of the best-performing currencies in the world.
Why is the naira falling?
The recent fall of the naira has been attributed to the return of forex speculators, citing the new crypto exchange platforms BYBIT and BITGET as the cause of the latest slip, the Nation reports.
These platforms became trending topics on Twitter, with many claiming that forex manipulators rushed to crypto platforms to drive updollar'slar's value for gains.
Legit.ng reported how the Nigerian government's clampdown on the crypto platform Binance helped drive down the dollar exchange rate from as high as N1,950 in mid-February to N1,200 until Wednesday, when the naira started losing some ground to the dollar again.
There are now calls on social media for the federal government to step in and stop the operations of the peer-to-peer crypto platforms to prevent further depreciation of the naira.
FG gives assurance
Despite the concerns, vice President Kashim Shettima is optimistic that the naira will regain its status as a currency to reckon with.
He said this while speaking with the Lagos State Chambers of Commerce(LCCI) during a visit to his office.VP's VP’s spokesman, Stanley Nkwocha, quoted him as telling his visitors:
“The naira went haywire and some people were celebrating. But inwardly, we were laughing at them because we knew that we have the leadership to reverse the trend.
"Asiwaju knows the game, and truly the naira is gaining and the difference will drop further.”
UK firms predict exchange rate in 2024
Earlier, Legit.ng reported that two UK-based financial institutions predicted a new exchange rate for the naira against the dollar.
Goldman Sachs and Standard Chartered opined the naira would rebound and close stronger in 2024.
Their predictions were based on the current reforms by the Cardoso-led CBN.
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Source: Legit.ng
