Current Exchange Rate Of Dollar To Naira Black Market
What is the Black Market?
The black market refers to the illegal trade of goods or services, including currency exchange. In Nigeria, the black market for foreign currency is a common sight, especially for the US dollar, which is the most popular foreign currency in the country.
Why the Black Market?
The black market for foreign currency exists because of the high demand for foreign currencies in Nigeria, coupled with the restrictions placed on the official exchange rate by the Central Bank of Nigeria (CBN).
The CBN, in an effort to manage the country's foreign exchange reserves and stabilize the value of the naira, sets an official exchange rate for foreign currencies. However, due to the limited availability of foreign currency at this official rate, many Nigerians turn to the black market to get their hands on foreign currency.
Current Exchange Rate of Dollar to Naira Black Market
As of August 2021, the current exchange rate of the US dollar to the Nigerian naira on the black market is around 518 naira to 1 dollar. This means that if you want to exchange $100 for naira on the black market, you would receive around 51,800 naira.
Factors Affecting the Exchange Rate
Several factors affect the exchange rate of the US dollar to the Nigerian naira on the black market. These include:
- Political instability in the country
- Oil prices
- Foreign exchange reserves
- Inflation rate
- Interest rates
These factors can cause the exchange rate to fluctuate, sometimes drastically, on the black market.
Impact on the Economy
The black market for foreign currency has a significant impact on the Nigerian economy. It can lead to a shortage of foreign exchange reserves, which can affect the country's ability to import goods and services.
In addition, the high exchange rate of the US dollar to the Nigerian naira on the black market can make it difficult for businesses to import goods and can lead to inflation, as the cost of imported goods increases.
Conclusion
The current exchange rate of the US dollar to the Nigerian naira on the black market is an important topic for many Nigerians. While the black market for foreign currency exists due to restrictions on the official exchange rate, it has a significant impact on the Nigerian economy.