Nigeria: Key Steps Nigeria Took Last Week to Save Naira
The move by the government seems to be yielding the desired outcome across the unauthorised forex market since Saturday, as the naira appreciated slightly by the weekend.
Nigeria’s naira has on several occasions in recent weeks tumbled across both the official and unofficial markets amidst an increased forex demand and a significant spike in the prices of goods and services across the country.
The local currency traded at an average of N1500 and above mark at the spot market last week, closing the week on a negative note at N1,665.50/$1 last Friday — the lowest the currency has ever recorded at the segment according to data posted by FMDQ.
Similarly, amidst speculations and uncertainties about supply constraints in the forex markets, the naira extended its depreciation run at the parallel market last week, creating apprehension across the different sectors of the economy. At the segment, the currency traded at a record low of N1,700 and above mark amid increased demand and market uncertainties.
This disturbing trend prompted the Nigerian government to undertake some major measures and reforms in an effort to safeguard the country’s foreign exchange market and combat speculative activities.
The move by the government seems to be yielding the desired outcome across the unauthorised forex market since Saturday, as the naira appreciated slightly by the weekend.
Market data posted over the weekend indicated that the dollar was exchanged at the parallel market at N1,500 to a dollar on Sunday as against N1,720 and above it traded last Friday.
Restriction on digital assets platforms
In an effort to curb naira depreciation against the dollar, the federal government last week, among several other measures, blocked the online platforms of Binance and other crypto firms to avert continuous manipulation of the forex market and halt illicit movement of funds.
Apart from Binance, other platforms such as Forextime, OctaFX, Crypto, FXTM, Coinbase, Kraken, among others, were equally blocked.
Earlier on Tuesday, the office of the National Security Adviser directed law enforcement agencies to take firm measures against anyone engaged in foreign exchange market speculation.
The government also announced that it was planning to raise $10 billion to improve liquidity in the foreign exchange market.
By Abdulkareem Mojeed
