The development came two weeks after the local currency came under severe pressure on the black market following the announcement by the Federal Government to redesign the naira. The naira, which fell consistently throughout last week against the United States dollar, tumbled to an all-time low of 910/dollar last weekend.

However, the currency began a rebound against the greenback on Monday, after a week-long clampdown on foreign exchange dealers in Abuja, Lagos, Kano, and other major cities by the personnel of the Economic and Financial Crimes Commission.

EFCC officials had arrested over 90 bureaus de change operators across major cities in the country over allegations of currency hoarding and aiding politically exposed Nigerians and other criminal elements in money laundering.

The naira, which was bought and sold on the streets of Lagos and Abuja between 735 and 745 per dollar about two weeks ago, began a free fall shortly after the decision of the Federal Government to redesign the local currency.

On Monday, however, the naira rebounded and was bought and sold between 850 and 860 dollars. The national currency gained significantly and steadily on Tuesday and Wednesday and closed at 720/dollar on Thursday.

Financial analysts and forex dealers who spoke to our correspondents attributed the development to market sentiment and the activities of the EFCC personnel.

The clampdown on forex dealers was said to have forced several BDCs into hiding, a move that reportedly made many politically exposed individuals and currency speculators hold back in their demand for the greenback.

There had been a huge demand for the dollar at the parallel market in Lagos, Abuja, and other cities.

Speaking with our correspondents on Thursday, a BDC operator at the Murtala Muhammed Airport in Lagos, Mustafa Abdullahi, noted that he bought the local currency for 715 dollars and sold it for 720 dollars.

He said several BDCs had gone into hiding following the EFCC clampdown, adding that the demand for the greenback had dropped significantly.

“Many of our people have lost hundreds of millions of naira due to the fall." Many of them bought the dollar when it was over $800. Now the US currency has started falling, and they are losing several million. "I personally lost millions of naira.” Seriki Muhammed, another BDC operator at the Lagos airport, said he also bought the greenback for 717 dollars and sold it for 721 dollars on Tuesday.

Muhammad told our correspondent that some BDCs were licking their wounds because some had bought over $500,000 at about 820 per dollar in anticipation of further losses in the naira's value. “We are in big trouble unless the dollar rises again. "Many of our people bought so many dollars, hoping it would gain further,” he told one of our correspondents. A currency dealer in Allen Avenue, Ikeja, Lagos, simply identified as Gambo Bello, said he was buying and selling US currency for N715 and N720. Abubakar Hamid, a BDC operator in Abuja, told one of our correspondents that he bought the US dollar for N716 and sold it for N719.

Also, Zakari Mohammed, a BDC operator in Lagos Island, told our correspondent he was buying and selling at N718 per dollar and N722 per dollar. However, the President of the Association of BDC Operators of Nigeria, Aminu Gwadabe, said market sentiment and the news of the naira redesign drove the market in the past two weeks. He said the rebound of the naira had made many currency speculators lose millions of naira.

According to him, many forex dealers did not know the naira would rebound too soon. He said, “I can say the surveillance by the EFCC and other factors affected the market." However, I can say that some global factors also affected the market, aside from the local issues in Nigeria. Don’t forget that countries like Saudi Arabia, Russia, and China are taking some steps that are currently affecting the dominance of the dollar. “But locally, I can say certain sentiments made the naira rebound, and these have led many speculators to lose millions of naira. Many took a position at N800/dollar, and now they are worried the currency is now N720/dollar.

This was why there was some resistance in the market today, with many BDCs not willing to sell their dollars at a lower amount. People who kept the greenback are now bringing it out because of certain market sentiments. Dr Muda Yusuf, Chief Executive Officer of the Center for the Promotion of Private Enterprise, noted that the rush for dollars had subsided following the announcement of the redesigned naira.

According to him, this decline might have led to the rebound of the naira. He said, “It is a very volatile situation." The immediate reaction to that pronouncement triggered a rush to convert to dollars. That round of reaction is already beginning to die down.

That’s a possible factor. Once that initial rush has subsided, it is possible that the pressure on the dollar will reduce. He also noted that the recent rumor about some expiring dollar bills might have contributed to the rebound of the naira.

However, Yusuf noted that there were still a lot of uncertainties and that the situation was still volatile. He also said that the recent arrest of some BDC operators likely did not add to the rebound.

Yusuf further noted that there was a possibility that a number of speculators were cautious and aware of the volatile situation, which might have prevented them from any losses. He, however, said that sometimes one loses and sometimes one win when speculating.

A development economist, Dr Aliyu Ilias, noted that the naira might likely still decline, especially with the coming election. He also said that the economy had yet to be stable and the rebound might not last for long.