March 07, (THEWILL)- Despite the travails and the planned exit of the crypto exchange platform, Binance, announced on March 5, 2024, the naira maintained a free fall for the second day, hitting N1,605.74/$1 on Wednesday, March 6.
The domestic currency had tumbled to N1,602.43/$1 on Tuesday, the first day of the announced discontinuance of Binance on the Nigerian forex trading system.
The naira on Wednesday plunged further to N1,605.74/$1 – representing the lowest point in one week since it traded N1,609.51/$1 on February 28.
Analysts express doubts over the efficacy of the recent CBN actions towards achieving a stable and more favourable exchange rate of the naira as the steps taken by the apex bank address the demand end and not the supply side of the forex imbroglio.
Binance had on Tuesday disclosed plans to discontinue all Nigerian Naira (NGN) services on its platform, with a detailed timeline provided for users to take necessary actions.
According to the notice it sent to its customers, Binance users were urged to withdraw their naira balances, trade their NGN assets, or convert naira into cryptocurrencies before the discontinuation of NGN services.
Coming shortly after the announced arrest and detention of Binance executives on a visit to the country by the Nigerian Department of Security Services (DSS), and the Central Bank of Nigeria (CBN) disclosure that Binance contributes significantly to the rapid depreciation of the naira, it was expected that the exit of Binance will automatically arrest the steep fall of the domestic currency.
The CBN Governor, Olayemi Cardoso, at the end of the Monetary Policy Committee meeting on February 27, told journalists that about $26 billion flowed through Binance Nigeria over the past year from ‘unknown sources’.
The federal government also accused the platform of engaging in foreign exchange rate manipulation through currency speculation and rate fixing.
Nigeria is recognised as one of the largest cryptocurrency markets globally
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
