Naira Crashes to Above N900 Against US Dollar on P2P FX Market, ABCON Blames Binance

Naira Crashes to Above N900 Against US Dollar on P2P FX Market, ABCON Blames Binance

  • The value of the naira continues the struggle against the dollar, pound, and euro across all foreign exchange markets
  • One dollar on the peer-to-peer window of the forex market is now selling above N900, and it is expected to worsen
  • Consequently, ABCON has advised the federal government on what should be done to strengthen the naira again

The Nigerian currency, the naira, performed poorly at the Peer-2-Peer (P2P) window and in the black foreign exchange markets.

According to data obtained by Legit.ng, the naira on the P2P platform, mainly utilised by cryptocurrency traders, was exchanged at a rate of N903 to a dollar on Tuesday, August 8, 2023.

This signifies a loss in value of N6 or 0.66%, compared to Monday's exchange rate of N897 to a dollar.

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Naira to dollar exchange rate
Naira at the unofficial market is exchanging as high as N900 Photo credit: Tom Saater
Source: Getty Images

At the parallel market, which is mainly street traders, data from Aboki FX showed that a dollar sold at N902 on Tuesday.

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Naira exchange rate at official market

It was a different performance for the naira in the official market, which is the Investors and Exporters (I&E) segment.

FMDQ securities report that the naira at the I&E window appreciated against the dollar on Tuesday to N757.51 from the previous day's rate of N774.78/$1.

ABCON advises the federal government

Meanwhile, the Association of Bureaux De Change Operators of Nigeria (ABCON) has called on the federal government to ban the activities of Binance, a cryptocurrency exchange company in Nigeria.

Aminu Gwadabe, president of ABCON, who made the call, described Binance as one of the many factors putting pressure on the naira, the Cable reports.

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He explained:

"If you're familiar with Binance, you'd understand that Binance trading is now becoming the central point for both the investors' and exporters' windows, as well as the parallel market. This is regrettable.
"We need to take action to curb the influence of Binance. It's a competition; we must find a way to restrict Binance, and the only effective approach is by boosting our liquidity.
"At this moment, Binance holds the title for the most liquid market. They handle around 1.2 million transactions per second," Gwadabe remarked.

The ABCON president also stressed that there was a lot of pressure on the naira from foreign exchange hoarding by the banks and oil companies.

He added:

“Spike and volatility did not start now, it’s something the present government inherited and has gone a long way in checking illegal behaviours around the foreign exchange market, and that is the objective of the unification.”

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CBN speaks on license status of 2,698 BDCs as naira falls again

The Central Bank of Nigeria has responded to reports that it withdrew over 2,000 Bureau de Change operators' licenses.

The reports of withdrawal come amid the continued depreciation of the naira at the official and black markets.

The CBN and the Bureau De Change Operators of Nigeria spoke with Legit.ng to set the records straight.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.