I am very surprised that abokiFX has easily suspended publishing rates. This is what simpletons do. Yes, instead of publishing a white paper to defend its data collection mechanism, it froze. And with this universal suspension, it does appear increasingly that the Central Bank of Nigeria (CBN) was right on the money!
Companies are accused of things all the time. Typically, you open your playbook and explain what you are doing. Coinbase, Rohinhood, etc do not suspend operations because of regulatory accusations or oversights. So, when companies easily chicken-out, the implication is that something bad may be happening.
It would be a serious betrayal to all Nigerians if indeed AbokiFX was pushing those rates without any supporting data. I mean, the FX business is built on data and that data system is expected to be empirical. But here when a company is not even bold to defend its process, you get a sense that it was flaming.
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Do not remind me that CBN may be a bully. That does not qualify here. You do not push fake “data” to markets without consequences. I am hoping that CBN is wrong and AbokiFX was improperly maligned. But if otherwise, that would be troubling.
May it not be that they were just playing with numbers without any core basis and in the process dragging a nation down. What abokiFX does is not bad but it has to be data-driven and unbiased. Aggregators are vital in markets provided the data collection process has no fudge factor. I do think by having an easy way to know the parallel rates, transactions can move faster.
With that, I am still asking, without AbokiFX to rely on, what is the current black market rate of Naira? If you struggle with that, you will then appreciate why digital aggregators are super-amazing in redesigning market equilibrium points.
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Comment #1: Very apt perspective. I couldn’t agree more.
This action taken by AbokiFx suggests they have deliberately acted in bad faith and outrightly broken the law which may be subject to prosecution. However, if this is not the case, the basis for their price discovery should be published for public review.
It is pertinent to underscore the importance of a price agregator in the parallel market and in my view, I disagree that publishing figures based on market price discovery (for a non-bank) is in violation of of the law but what do I know?
My Response: “I disagree that publishing figures based on market price discovery (for a non-bank) ” – the premise of your point is that there was a price discovery to start with. What if they were waking up and fudging numbers, what would you say?
Also, not being a bank is irrelevant. You do not need to be a bank to be operating in the “banking industry”. People went to jail in UK for manipulating libor rates. People are being prosecuted in US for inflating stocks in Reddit. Governments do not see “financial institutions” as only those who wear suits. The game has since changed.
Comment #2: On Friday, the dollar exchanged at 570, today it goes for 575 two days after AbokiFX suspended operations. There is a reason why AbokiFX decided to shut down operations and anybody who knows Nigeria under these guys would know that its best to just shutdown to appease them.
My Response: the issue is not the rate. The issue is the process for the largest parallel market rate supplier in Africa. You called and got N570 possibly in Lagos. But Lagos, Aba, Kano, Owerri, etc have different rates at any time. AbokiFX quotes for Nigeria, not Aba, Lagos or Abuja. How does it come to that number. If it has that data, it does not need to suspend. AbokiFX, CBN, etc will not fix FX crises, only factories and warehouses (modern and old) will do. That is a constant.
As Nigeria Waits for Dangote Refinery on Fuel, CBN Detours To AbokiFX on Naira
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Without a second thought aggregators are good. They make things easy. Now, for one with digital enablement, unconstrained by mortar and geography it impact are on exponential rate.
Thus, it’s imperative for someone to watch over their affairs if there sanity of all matters, as handlers are not perfect creatures. Looking back, the 2008 financial crisis which many still have scars taught us that Humans could be foolish whilst others could be crooked! So, to avoid a repetition of economic collapse it good there is oversight!
AbokiFx actions are weak and unguided ways of handling regulatory issues, and even if they are not wrong it shows their is a lap in the internal structure where one man calls the shot!
So going further would not just be about proving their innocence but checking their maturity level on handling issues either from the government and futuristic problem.
Silence or self preservation is an known route to cover lies. Brands strengthen their reputation when the are more open during crisis.
Good evening.
It’s like asking most of our ‘rich’ guys to defend the source(s) of their riches, that’s when you discover many things you see weren’t built on anything.
It’s always easy to blame government officials when they go after businesses or individuals, yet nobody has offered a template on how to treat law breakers in this kind of environment, without being accused of high-handedness or intimidation. Our default state is to see government as the aggressor or the wrong person, as if we have responsible citizens that do the right things always.
Even on the statement the website provided while suspending its operation, it managed to slight our naira and the CBN, and by extension the Nigerian people, without providing sound argument on why what it’s doing was legal and ethical. We tolerate many things here that no responsible nation treats lightly, because it is Nigeria.
People attack our institutions and sovereignty regularly, but to many, the fight is against occupiers of those offices alone, forgetting that any damage inflicted affects everyone, our ignorance is legendary.
When people are keen to set your house on fire, and you assist them with lighter and petrol, forgetting that you are on your way to being homeless once the house starts burning; your eyes will clear when the ashes settle.
I have read a lot of comments and arguments about our Apex bank banning of so called “economy saboteur” AbokiFX and I keep wondering how knowledgeable are the people we saddled with the responsibility of leading our nation into finical prosperity.
This is not to exonerate AbokiFX, but before you take it to Golgotha just know that prior to its existence our naira has been crumbling and to some folks dismay the downward trend of naira has refused to abate even after it ceased to dish out price.
You and CBN called it speculator and I see its activities as a mere aggregator that had little or no effect on free fall of naira at least, pending the outcome of CBN investigation of its bank accounts since putting the cart before the ? horse is embedded in our DNA. If AbokiFX is found to be engaging in any form of sharp practices it should receive a severe punishment in commensurate with crime committed against the Nigeria state.
From the above, my take on this is crystal clear. Mr. Emefiele’s led CBN is not living up to the expectation of majority of Nigerians and there’s no reprieve on the horizon for our dearest naira. For some of you, the see evil say no evil, in a mono economy like ours coupled with strong love for importation, indiscriminat borrowing, mammoth security challenges as well as lack of workable monetary and fiscal policy, end to naira’s downward trend is not in site.
Also for some of you armchair commentators, AbokiFX did not post price of its own. It only aggregate available market prices and this is known to some of us who are in the market on a daily basis.
I only deduced one thing from Emefiele’s last press release, a leader or group of leaders who are bereft of idea and out of touch with the reality.
Sir, there’s nothing wrong in bowing out even when the ovation is no longer loud.
Hmmmm! I share similar opinion. This case is like a losing team destroying the scoreboard for recording and showing the scores of his team’s game instead of working on his team to have improved result.
Hmmmm! I share similar opinion. This case is like a losing team destroying the scoreboard for recording and showing the scores of his team’s game instead of working on his team to have improved result.
I’m sorry but your argument is weak. AbokiFX cannot fix black market rates anymore than the CBN can. Even if there are discrepancies in the prices, we are talking a few naira/kobo not enough to sway the entire forex market.
Remember, AbokiFX cannot make trades so any price action that sticks is because Buyers are willing to buy at said prices and sellers are willing to sell. Sellers will only lower their prices if selling is difficult and vice-versa.
What are the incentives for AbokiFX to publish higher and higher dollar rates when the only reason people use them is because of their accuracy!
And even then Nigerians will only pay for those dollar prices because they simply can’t get enough liquidity to escape the rising prices. If the CBN were to make usd available at the official rate, be rest assured the prices will come down whether AbokiFx likes it or not
The fact is that the Naira is weakening day by day and no blame slinging will change that. I think that’s why they shut down the service to essentially prove their innocence in the court of public opinon.
All this has nothing to do with whether or not their director is involved in Illegal FX activity, both things can be true at the same time.
As for your white paper, they published a statement explaining how the rates are essentially averaged out from the prices given by randomly select BDC operators and the Operators don’t know why the rates are requested.
Again remember, that they sell this historical data as APIs so their incentives are highly geared towards accuracy
If you feel their service is not accurate enough, please start one and we will definitely use your service as there is a void now
About how AbokiFX gets their rates, they clearly explained it in their letter. If you are waiting for academic whitepaper, send them an Email
https://sureyarns.com/see-abokifxs-response-to-the-cbn/
The CBN is confused. The only thing that this administration knows how to do is to disappoint us with useless policy that kill Nigerian Business.
Why do I have a feeling that Lamido Sanusi had he been at the helm of this saga, would have reacted differently. Where’s the CBN’s “White Paper” justifying its actions? Let’s be mindful of where the burden of the proof lies. The jury in this matter or case, should be the Nigerian public. For now, both sides remain innocent until proven guilty. My twopence.