Dollar To Naira In Black Market In Nigeria Today
The Nigerian currency is the Naira, which is abbreviated as NGN. The exchange rate of the Naira to other currencies, especially the US dollar, is a hot topic among Nigerians. The black market is the informal sector where foreign currencies are exchanged for the Naira. In this article, we will take a closer look at the dollar to Naira exchange rate in the black market in Nigeria today.
What is the Black Market?
The black market is the informal sector of the economy where goods and services are traded illegally or without government regulation. In Nigeria, the black market is where foreign currencies are exchanged for the Naira outside of the official exchange rate set by the Central Bank of Nigeria (CBN).
The Official Exchange Rate of Dollar to Naira
The Central Bank of Nigeria (CBN) is responsible for setting the official exchange rate of the Naira to other currencies. As of August 2021, the official exchange rate of the US dollar to the Naira is around 411 NGN to 1 USD. However, this rate is only applicable to transactions done through official channels such as banks and licensed money transfer operators.
The Black Market Exchange Rate of Dollar to Naira
The exchange rate of the US dollar to the Naira in the black market is often higher than the official exchange rate. This is because of the high demand for foreign currencies in Nigeria and the limited supply available through official channels. As of August 2021, the black market exchange rate of the US dollar to the Naira is around 515 NGN to 1 USD.
Factors Affecting the Black Market Exchange Rate
Several factors influence the exchange rate of the US dollar to the Naira in the black market. One of the significant factors is the country's economic situation. When the economy is performing poorly, there is often a higher demand for foreign currencies, which leads to a higher exchange rate in the black market. Other factors include government policies, political instability, and inflation.
Impact of the Black Market Exchange Rate on Nigerians
The high exchange rate of the US dollar to the Naira in the black market has a significant impact on Nigerians. It affects the cost of imported goods, including essential commodities like food and medicine. It also affects the cost of travelling abroad and the ability of Nigerians to send money to their families living overseas. The high exchange rate also affects businesses that rely on imported goods or services.
The Government's Efforts to Tackle the Black Market Exchange Rate
The Nigerian government has taken several steps to tackle the high exchange rate of the US dollar to the Naira in the black market. One of the measures is the introduction of the Naira for Dollar Scheme, which rewards Nigerians who receive remittances through licensed money transfer operators with five nairas for every dollar received. The scheme is aimed at encouraging Nigerians to receive remittances through official channels instead of the black market.
The Future of the Black Market Exchange Rate of Dollar to Naira
The future of the black market exchange rate of the US dollar to the Naira is uncertain. It depends on several factors, including the government's policies, the state of the economy, and the global economic situation. However, Nigerians can take advantage of official channels to exchange foreign currencies to reduce their reliance on the black market.
Conclusion
The exchange rate of the US dollar to the Naira in the black market in Nigeria today is a reflection of the economic situation in the country. The government has taken steps to tackle the high exchange rate in the black market, but it remains a significant challenge for Nigerians. However, Nigerians can take advantage of official channels to exchange foreign currencies to reduce their reliance on the black market.