Nigeria clamps down on forex traders amid persistent naira woes

Nigeria rounded up foreign currency street traders and took aim at a popular crypto trading platform in its latest effort to stem the free-fall of the naira.

The currency has declined sharply this week on the unofficial market — at one point on Thursday touching 1,900 to the dollar — widening its discount to the naira’s official rate and frustrating government efforts to unify the two.

The weakness extends a months-long slide since President Bola Tinubu relaxed the country’s foreign exchange regime to attract foreign investment that Africa’s most populous nation badly needs.

The naira has lost around 70% of its value against the dollar since the currency’s widely-criticized peg was relaxed in June.

But hoped-for inflows of US currency have been slow to arrive and the resulting lack of local dollar liquidity has triggered sharp swings in the naira’s street value.

That’s focused official attention on the country’s many forex street traders, with anti-graft officers making several arrests in Lagos and elsewhere in the country this week.

Aminu Gwadabe, president of the Association of Bureaux de Change Operators of Nigeria confirmed the arrest of some traders, but said they were unlicensed operators.

The Economic and Financial Crimes Commission had previously warned it was setting up a task force to combat the mishandling of the naira and dollarization of the economy.

In a separate development, a presidential spokesman accused crypto trading platform Binance of manipulating the naira, posting on X that reports it had been blocked were correct. Binance on Thursday confirmed that some users in Nigeria were experiencing issues accessing its website.

The cost of a USDT token in naira on the Binance platform is used by many young Nigerians as a proxy for naira’s exchange rate against the dollar.