Naira Value Falls To 540 To A Dollar As EFCC Warns Banks Against Forex Fraud

The naira has traded its worst in years in the unofficial market after the Central Bank of Nigeria (CBN) said it is not worried about naira valuation.

The naira in the unofficial market controlled by the different Bureau de Change operators traded N540 per dollar. It had traded N532 to the dollar before the apex bank comment.

This is N30 devaluation against the dollar between September 9, 2021 and August 10 when it traded N510.

The naira also slumped against the British pounds trading N740 which is down from N732 traded on Monday and N703 traded on August 10.

This is coming after the Director of Monetary Policy, Hassan Mahmud, said on Tuesday that the bank was not worried about the devaluation of the naira.

“We are not really bothered much about valuation. What we are worried about is the supply side and the confidence in the system,” Mahmud had said during a virtual investor conference.

Dollar bills have become so scarce in the market due to the recent policy of the CBN to channel forex from the unofficial market to banks.

Since March 2020, CBN has devalued the naira thrice on dollar scarcity which was worsened by Covid-19 induced oil price crash.

CBN Governor, Godwin Emefiele, in June devalued the official rate of the naira to N410 from N379 per US dollar.

Meanwhile, the chairman of the Economic and Financial Crimes Commission (EFCC), Mr Abdulrasheed Bawa, has warned banks against fraudulent election financing, foreign exchange malpractice and money laundering.

Baba gave the warning on Thursday during an interactive session with managing directors of banks at the Lagos Zonal Command of the commission.

According to a statement by the EFCC spokesman, Wilson Uwujiaren, the anti-graft agency boss charged the bankers to comply with the guidelines of CBN on the issuance of Personal Travel Allowance, PTA, and Business Travel Allowance, BTA, to their customers.

“You need to ensure full compliance with regard to knowing your customers and ensuring that you do not give opportunities for foreign exchange malpractices,” he said.

Pointing out the salient issues EFCC will tackle, Bawa said, “Some of the issues we have identified include foreign exchange malpractices and fraudulent election financing.”

‘Banks selling to cabals’

The Chairman of BDC Operators, Local Airport, Mr. Danladi Sunday blamed the CBN for the development.

He said while the CBN had directed commercial banks to sell dollars, the banks only supply to “cabals.”

“The stoppage of dollars to bureau de change is the cause of this problem. The CBN said they would be giving to commercial banks and the commercial banks are not selling to everybody, they are only selling to their cabals,” he alleged.

“And once the demand is higher and supply is lower, definitely, the money is going to be high. The solution now is for the CBN to call us back. Once they call us back, the money would come down.”

Trading Desk Manager at AZA Murega Mungai said: “Despite the current weakness, the central bank on Tuesday said it still expects the country’s unofficial and official rates to converge.”

The Naira was trading at 411.30 to the dollar on the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) window this week. We expect the currency pressure to persist in the coming days as demand for forex continues to outweigh supply.