Exchange Rate Naira To Dollar In Black Market
Introduction
The exchange rate between the Nigerian Naira and the United States dollar has been a topic of discussion for many years. This is because the exchange rate plays a significant role in the economy of Nigeria. The official exchange rate is not always the same as the exchange rate in the black market. In this article, we will be discussing the exchange rate Naira to Dollar in the black market.
What is the black market?
The black market is an illegal market where goods and services are sold at prices higher than the official market price. In the case of the exchange rate, the black market is where people buy and sell foreign currencies, including the US dollar, at rates higher than the official exchange rate.
Why is there a black market for foreign exchange?
There are several reasons why there is a black market for foreign exchange in Nigeria. One of the main reasons is the restricted access to foreign exchange by the Central Bank of Nigeria (CBN). The CBN controls the supply of foreign exchange and has set restrictions on who can access it. This has created a demand for foreign exchange, which is met by the black market.
Factors influencing the exchange rate in the black market
Several factors influence the exchange rate in the black market. One of the main factors is the demand for foreign exchange. When the demand for foreign exchange is high, the exchange rate in the black market increases. On the other hand, when the demand for foreign exchange is low, the exchange rate in the black market decreases.
Another factor that influences the exchange rate in the black market is the supply of foreign exchange. When the supply of foreign exchange is low, the exchange rate in the black market increases. On the other hand, when the supply of foreign exchange is high, the exchange rate in the black market decreases.
Other factors that influence the exchange rate in the black market include inflation, political stability, and economic growth.
Current exchange rate Naira to Dollar in the black market
As of the time of writing this article, the exchange rate Naira to Dollar in the black market is around N550 to $1. This is higher than the official exchange rate, which is around N380 to $1.
The impact of the black market on the economy
The existence of the black market for foreign exchange has both positive and negative impacts on the economy. One of the positive impacts is that it provides an alternative source of foreign exchange for those who cannot access it through the official channels. This helps to meet the demand for foreign exchange and can stimulate economic growth.
However, the negative impacts of the black market on the economy cannot be ignored. One of the negative impacts is that it promotes corruption and illegal activities. It also leads to a loss of revenue for the government, as the transactions in the black market are not taxed.
Conclusion
The exchange rate Naira to Dollar in the black market is higher than the official exchange rate. The black market exists due to the restricted access to foreign exchange by the CBN. The exchange rate in the black market is influenced by several factors, including demand and supply, inflation, political stability, and economic growth. The black market has both positive and negative impacts on the economy.