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Forex crisis: Traders lose millions as naira rebounds

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The naira has rebounded by 20.8 per cent to 720/dollar at the parallel market, findings by The PUNCH have shown.

 

The development came two weeks after the local currency came under severe pressure at the black market, following the announcement by the Federal Government to redesign the naira.

 

 

The naira which fell consistently throughout last week against the United States dollar tumbled to an all-time low of 910/dollar last weekend.

 

 

However, the currency began a rebound against the greenback on Monday, after a week-long clampdown on foreign exchange dealers in Abuja, Lagos, Kano and other major cities by the personnel of the Economic and Financial Crimes Commission.

 

EFCC officials had arrested over 90 Bureau De Change operators across major cities in the country over allegations of currency hoarding and aiding politically exposed Nigerians and other criminal elements in money laundering.

 

 

The naira which was bought and sold on the streets of Lagos and Abuja between 735/dollar and 745/dollar about two weeks ago began a free fall shortly after the decision of the Federal Government to redesign the local currency.

 

 

On Monday, however, the naira rebounded and was bought and sold between 850/dollar and 860/dollar. The national currency gained significantly and steadily on Tuesday and Wednesday and closed at 720/dollar on Thursday.

 

 

Financial analysts and forex dealers who spoke to Punch correspondents attributed the development to market sentiment and the activities of the EFCC personnel.

The clampdown on forex dealers was said to have forced several BDCs into hiding, a move that reportedly made many politically exposed persons and currency speculators hold back in their demand for the greenback.

 

 

There had been a huge demand for the dollar at the parallel market in Lagos, Abuja and other cities.

Speaking with Punch correspondents on Thursday, a BDC operator at the Murtala Muhammed Airport, Lagos, Mustafa Abdullahi, noted that he bought the local currency for 715/dollar and sold it for 720/dollar.

 

He said several BDCs had gone into hiding following the EFCC clampdown, adding that the demand for the greenback had dropped significantly.

 

 

“Many of our people have lost hundreds of millions of naira due to the fall. Many of them bought the dollar when it was over N800. Now the US  currency has started falling and they are losing several millions. I personally lost millions of naira.”

 

Seriki Muhammed, another BDC operator at the Lagos airport, said he also bought the greenback for 717/dollar and sold it for 721/dollar on Tuesday.

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