smartbusinessinfohubAccording to our source, we can confirms why AbokiFX is being investigated by CBN. Owner of online foreign exchange rate website, AbokiFX is being investigated by CBN for Forex price manipulation.
Popular online breaking news website, TheCable first reported AbokiFX was being investigated. SmartBusinessInfoHub has also independently confirmed an investigation is ongoing.
Sources within the apex bank told TheCable on Thursday night that Adedotun and AbokiFX Limited are currently under investigation for “illegal foreign exchange transactions”.
AbokiFX is a web platform that reports movements in the foreign exchange market since as early as 2014. On Thursday, abokiFX reported that the naira was trading at 570 to the dollar at the parallel market.
An insider, familiar with the events, told us that “unusual forex transactions” were found in his account, suggesting the promoters of the platform have been involved in illegal forex trading.
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The apex bank is said to be investigating seven accounts belonging to Adedotun and abokiFX, vetting every forex transaction from 2019 till 2021.
The Central Bank of Nigeria is accusing the owner of the website, one Mr. Olusegun Adedotun Oniwinde of running a scheme tantamount to “economic sabotage” by using his website to set exchange rates. According to the source, Mr Oniwinde might be profiting from the speculative activities of the naira by setting exchange rates while living outside the country.
“Are we all comfortable with one unknown unlicensed man setting exchange rates in Nigeria while he lives in far away England?” the source queried.
Reports on social media claim that Adedotun is being investigated for foreign exchange rate manipulation, but another source within the bank said he could not confirm the rumours.
“There would be a lot more clarity after the next monetary policy committee (MPC) meeting tomorrow,” the source said.
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AbokiFX, registered in Arizona, United States, is the 63rd most visited website in Nigeria as of September 16, 2021.
How are black market rates obtained?
Before AbokiFX, black market rates are easily obtained via a simple phone call to black market operators, who confirm the rates.
Whilst there can be different rates quoted, the disparity is largely insignificant. Rates can also be different from state to state. However, with Aboki FX, most unofficial forex buyers or sellers, access the website to get a guide of what the rates are.
Nevertheless, most operators inform us that they get their rates from the forces of demand and supply and not from the website. Sellers of forex also decide on the final exchange rate after negotiations with their counterparties.
Yet, the CBN appears to be accusing AbokiFX of undertaking a grand scheme of setting an exchange rate that has probably led to the depreciation of the naira from N505/$1 before the ban to over N560/$1 as of September 16, 2021.
“How exactly does he collect his data? Do you know any BDC that supplies daily rates to him? Does he have staff on ground that collects these data?” they quipped, alluding to the growing popularity of AbokiFX in providing a widely accepted platform for gauging the black-market exchange rate which the central bank has often cited as being illegal and not representative of the forex liquidity and true value of the naira.
Despite the characterization of the black market by the apex bank, in 2016 when the black market rate fell to above N500/$1.
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The CBN Governor claimed victory when the rates unified with the official rates, strengthening to around N366/$1 as dollar liquidity hit the market with the advent of the Investor and Exporter window.
The current disparity, which is now above N140 and rising, is mostly attributed to the stable nature of the NAFEX, which is yet to depreciate despite dollar scarcity reported by businesses who require it for official transactions.
However, the exchange rate has recorded an unprecedented depreciation on the black market in the last few weeks especially since the ban on sale of forex to BDC operators.
Despite the depreciation going on in the parallel market, the exchange rate has traded within the N410/$1 band since the CBN aligned the NAFEX rates with its official rate.
Why Is CBN investigating AbokiFX
The investigation of AbokiFX underscores the pressure faced by the central bank to fight off speculators who they have accused of sabotaging the exchange rate. Publishing exchange rates, especially black-market rates predate the current forex crisis and has been a regular in newspapers since the advent of democracy.
Thus, most analysts who spoke to us on the condition of anonymity are worried about the direction of the central bank. Many believe censorship of AbokiFX or any website reporting black market forex rates will be seen as impinging against the right of freedom of the press or opinion.
It is also not clear what AbokiFX may have done wrong to suggest that they are sabotaging the economy, one lawyer explains.
Nigeria’s central bank has deployed several measures aimed at maintaining a stable exchange rate such as allowing foreign remittances to be paid in dollars, limiting forex deposits and withdrawals over the counter, introducing stringent documentation for forex utilization and most recently banning the sale of forex to BDC. None of these measures seem to have worked.
The apex bank had initially scheduled its MPC meeting for September 20 and 21, but had to reschedule to September 16 and 17, 2021 — but no reason was given for the move.
Godwin Emefiele, the governor of the CBN, will address the media on Friday to announce fresh MPC decisions.
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