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.
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.
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.
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