The naira is expected to keep on strengthening against the dollar on the parallel market this week as raids by the State Security Service (SSS) on forex dealers trading above N399/$ is set to continue in the short term, New Telegraph has learnt.
The naira was quoted at 455 to the dollar at the parallel market on Friday firmer than 460 per dollar the previous day and stronger than N470 to the greenback a week ago.
At the official FMDQ platform the naira was quoted at N304.75 to the dollar by commercial banks while the Central Bank of Nigeria’s (CBN) website showed that the local currency closed at N305.25/$.
Forex dealers attribute the naira’s strengthening to the recent clamp-down on roadside currency traders and some Bureaux De Change (BDC) operators by the SSS.
They predicted that the local currency will continue to appreciate as long as the momentum of the SSS’ current operation is sustained. The security agents’ action was reportedly prompted by a meeting held by the CBN, the SSS and the Association of Bureaux De Change Operators of Nigeria (ABCON) about a week ago during which the decision was taken that drastic measures were needed to stop the naira’s slide on the parallel market.
Since the raids began last Monday, several BDC and parallel market operators have been detained.In some cases, the operators’ bank accounts have also been blocked to deny them access to naira liquidity.
According to a dealer who asked not to be named: “We’ve stopped buying dollars from just anybody that walks into our shop due to the harassment from security agents and a directive from our association.”
ABCON President, Aminu Gwadab, told journalists that: “We have agreed among ourselves that the naira should be traded within a band of 390/400 a dollar at the bureau de change level, this is our own way of cutting off speculators from the market.”
The Apex bank has been unable to stop the naira’s slide on the parallel market, where importers go to buy dollars due to severe hard currency shortages in the system.
The economy has been pushed into recession partly by a slump in prices for oil, a key source of revenue that has the added attraction of coming in the form of dollars