The West African currency, CFA Franc, has crashed against the Naira to a new record low at the open market trading at 5680 CFA to N1000 due to the closure of Nigeria's land borders.
The nation's borders in four regions were shut down at the instance of a directive from the Office of the National Security Adviser (NSA) owing to the state of insecurity in the country.
Currently, the CFA has plummeted at the open market from 6890 before the closure, to a new record low of 5680. Also, the price per bag of a 50kg bag of rice which sold for between N10,000 and N11,500 has further crashed to between N8000 and N9000 depending on brand.
But the reverse is the case in Nigeria as investigation showed that whereas rice smuggling through the land borders has been effectively reduced, it has forced the market price of the commodity to surge from N14,000 or N18,000 to N19,000 per bag presently.
Consequently, smuggling through the waterways had never been so enticing as the smugglers understand that the only force they have to contend with is the Nigerian Navy, but whose primary and secondary concerns were crude theft prevention and seizure of adulterated diesels, instead of rice smuggling.
Economic and financial experts are however divided over the outlook for the Naira throughout the remaining part of the year; many have said the local currency may appreciate further in the coming months if the nation's borders remain closed beyond the stipulated 28 days mapped out for the ongoing joint exercise code named 'Exercise Swift Response'.
Also, according to a bureau de change source, currency traders were taken unawares by the new development.
The Nigeria Customs Service (NCS) exercise, with backup of the Joint Security Taskforce flagged off, few days back may have successfully achieved a water-tight, anti- smuggling land border closure, forcing smugglers to take to the sea instead.