Exchange Rate Australian Dollar To Naira Black Market
The exchange rate of the Australian dollar to the Nigerian Naira has been a topic of concern for a while now. The Nigerian economy has been struggling for years, and the exchange rate is one of the many indicators of this hardship. The exchange rate of the Australian dollar to Naira in the black market has been fluctuating, and this article aims to provide insight into this trend.
What is the Black Market?
The black market refers to the illegal or unofficial market where goods, services, or currencies are sold, usually at a higher price than the official market rate. In Nigeria, the black market is a popular alternative to the official foreign exchange market due to the scarcity of foreign currency and the strict regulations.
Why is the Exchange Rate of the Australian Dollar to Naira Important?
The exchange rate of the Australian dollar to the Nigerian Naira is essential because it affects the purchasing power of Nigerians who import goods from Australia or have relatives or businesses in Australia. A high exchange rate means that Nigerians will have to pay more Naira to buy Australian dollars, which can affect the prices of goods and services in Nigeria.
Factors Affecting the Exchange Rate of Australian Dollar to Naira in the Black Market
The exchange rate of the Australian dollar to Naira in the black market is determined by various factors, including:
- Demand and Supply: The demand and supply of currencies play a significant role in determining the exchange rate. If the demand for Australian dollars is high, and the supply is low, the exchange rate of the Australian dollar will increase.
- Inflation: High inflation rates in Nigeria can lead to a decrease in the value of the Naira, which can result in a high exchange rate of the Australian dollar to Naira.
- Political Stability: Political instability in Nigeria can lead to a decrease in foreign investment, which can lead to a decrease in the supply of foreign currency and an increase in the exchange rate of the Australian dollar to Naira.
- Oil Prices: Nigeria is a major oil-producing country, and the price of oil can affect the country's economy and the exchange rate of its currency.
Current Exchange Rate of Australian Dollar to Naira in the Black Market
As of September 2021, the exchange rate of the Australian dollar to Naira in the black market is around 320 Naira to 1 Australian dollar. This rate is higher than the official exchange rate of around 250 Naira to 1 Australian dollar.
Effects of the High Exchange Rate of Australian Dollar to Naira in the Black Market
The high exchange rate of the Australian dollar to Naira in the black market has several effects, including:
- Inflation: A high exchange rate can lead to high inflation rates in Nigeria, which can affect the prices of goods and services.
- Devaluation of the Naira: A high exchange rate can lead to a decrease in the value of the Naira, which can affect the country's economy.
- Reduced Purchasing Power: A high exchange rate can reduce the purchasing power of Nigerians who earn Naira and want to buy goods or services priced in Australian dollars.
- Increased Cost of Importation: A high exchange rate can lead to an increase in the cost of importing goods from Australia.
Conclusion
In conclusion, the exchange rate of the Australian dollar to Naira in the black market is an important economic indicator in Nigeria. The rate is affected by various factors, including demand and supply, inflation, political stability, and oil prices. The current exchange rate is high, and this has several effects on the Nigerian economy and its citizens.