Naira rebounds amidst rush to donate old banknotes

Trade at the Nigeria Foreign Exchange market closed on a positive note, at the close of the trading week as the naira recorded significant gains it began with at the start of the trading on Monday.

Naira rebounded by about 8.72% to trade at N680/1$ at the parallel market otherwise known as the black market, on Friday, November 12 as against the N745/$1 it exchanged for the previous day.

This is coming after about two weeks that the local currency faced severe pressure on the black market, following the announcement by the Central bank to redesign major banknotes.

What could be responsible for the naira’s appreciation?

Naira traded for an all-time low exchanging for as high as N900/ $1 in the past weeks but began to rebound against the US dollar exchange for between N850/$1 and N860/$1 at the beginning of trading on Monday, maintaining a steady and significant gain all through the trading weekdays, to close at N680/$1 on Friday.

Financial analysts and forex dealers attributed the naira’s gain to the recent activities of the Economic and Financial Crimes Commission, and EFCC officers, who raided Bureau de Changes hubs in Lagos and Abuja.

EFCC’s clampdown on black marketers and Forex dealers has apparently forced many BDCs operators into hiding, a development that has reportedly forced politically exposed moneybags and currency speculators to hold back in their demand for dollars.

BDCs operation recounts the loss

As the demand for dollars witnesses a significant drop occasioned by the EFCC raid, the bureau de change operations is recounting its losses. Speaking to the Punch newspaper correspondent, a BDC trader at the Lagos Airport, Seriki Muhammed revealed that some BDC operators are “licking their wound”. He said “we are in big trouble unless the dollar rises again. Many of our people bought so many dollars, hoping it would gain further”, adding that the naira’s rebound has made many BDCs operators lose millions of naira.