One year after the Central Bank of Nigeria (CBN) accused AbokiFX, a website that collates black market exchange rates of conducting illegal activities hurting the currency’s rate, the Naira has lost 25 per cent of its value.
AbokiFX had functioned as a benchmark by which Nigerians calculated the rate of the Naira in the black market. But the CBN had frowned at the actions and accused the firm of currency manipulation at a time of rapid Naira depreciation.
Addressing journalists after the Monetary Policy Committee (MPC) meeting, on September 17, 2021, the apex bank Governor, Godwin Emefiele, said the CBN had studied the activities of AbokiFX in the last two years and that the publisher of the platform, Oniwinde Adedotun, was involved in illegal forex trading.
“There was a time we asked our colleagues to call the AbokiFX to ask how he conducts the rates. He lives in the UK and publishes arbitrary rates without contacting Bureau De Change Operators (BDCs) in Nigeria.
Mr Oniwinde, we will track you, we cannot allow you to continue to kill our economy.
He uses his website for forex manipulations and speculations by purchasing forex to make a profit. It is completely illegal and unacceptable. Mr Oniwinde is an illegal FX dealer that have inflow and sold tens of millions of FX to several Nigerian companies in contravention of the FX law, he directly benefits from the rates he quotes daily on his website.
The only exchange rate market remains the Investors and Exporters (I&E) window. I am sorry to say that I do not, and I do not intend to recognise any FX in the market. Go to your bank. Even if your limit is above what the bank is selling, put it forward, and we will look into it”, Emefiele had said.
Issuing a swift response, the website’s owner, Oniwinde, categorically refuted the claims and suspended the platform’s display of FX rates pending the settlement of the case.
He said, “AbokiFX has taken the decision today, the 17th of September 2021, to temporarily suspend rate updates on all our platforms until we get better clarity of the situation.”
At that time, the Naira was trading around N570/$; one year later, the Naira has plummeted to around N710/$. This represents a 25 per cent drop in one year.
In a recent tweet dated September 17, 2022, AbokiFX sent a friendly reminder to the public suggesting it had no role in the free fall of the Naira despite the many accusations.
“September 17, 2021. N570, September 17, 2022. N710. It’s been 366 days. -25 per cent. This time last year, we suspended rate publication to test the impact on the parallel market exchange rate. A further 25 per cent decline has been recorded”, Aboki FX tweeted.
Across the FX windows, the naira was flat at N436.25/$ at the I&E window but depreciated by 0.1 per cent to N709.00/USD at the parallel market last week. Reacting to recent tweet by AbokiFX, analysts said until Nigeria ramps up the supply of the dollar, Naira depreciation will continue.
An analyst who pleaded anonymity due to sensitivity of the matter, said that the CBN cannot continue to fight a supply problem when it is cutting demands.
He said, “Foreign Direct Investments (FDIs) and exports are good ways of exploring this situation. We need to supply so that we can establish an equilibrium. With the current realities as regards the happenings at the parallel market, I think I would say AbokiFX was right but the onus is on the CBN to ensure that an average Nigerian gets FX from all banks in the country”.
For their part, analysts at Cordros Research in a weekly assessment of performance of the FX market, said, “Although the CBN has enough liquidity to support the FX market over the short term, we highlight that foreign inflows are paramount for sustained FX liquidity over the medium term. Considering the tepid accretion to the reserves given the low crude oil production level and elevated PMS under-recovery costs, FPIs that historically supported supply levels in the IEW will be needed to sustain FX liquidity levels in the medium to long term.
Hence, we think further adjustments in the NGN/USD peg closer to its fair value and flexibility in the exchange rate would be significant in attracting foreign inflows back to the market”.