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Dollar (USD) To Naira Black Market Rate Today 1st December 2023

Dollar USD To Naira Black Market Rate Today

Updated on :

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Access your interest in the Dollar (USSD) to Naira Black Market Exchange Rate Today, Saturday, 22 June 2024, on Val9ja.

This platform has attained the official Naira black market exchange rate as sourced by the likes of Black Market rates, Bureau De Change (BDC) rate, and CBN rates.

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How Much Is The Dollar To Naira Exchange Rate Today?

Dollar To Naira Black Market Exchange Rate Today (Aboki Dollar Rate): 

Val9ja News sourced that the exchange rate for a Dollar to Naira in the various vicinity of Lagos and Onitsha Parallel Market (Black Market) today is ₦1160 to ₦1165 as of the time of articulating this report.

Exchange Rate Of Dollar To Naira in Black Market Today?

Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Buying Rate ₦1160
Selling Rate ₦1165

AbokiFx, which collates black market rates, astonishingly sold at ₦1160 per $1 at the parallel market, also promoted as the black market, today marked Saturday, 22 June 2024, in Lagos, Nigeria.

Key Factors Influencing Foreign Exchange Rates Today

As the market circle swerves heated there have been vast phases of trauma experienced by the players. Some of these factors indicate dwindling dollar-to-naira exchange rates.

Below are some of the causes of the dwindling dollar-to-naira exchange rate;

Speculators: Stockpiling money for a possible profit has resorted the value of Naira under the influence of Speculators.

Conditions of Trade: Although Nigeria faces a demeaning trade deficit featuring 80% importation, desired Trade Terms increase the value of Naira to Dollar.

Inflation Rates: This is centered on the economic value of Nigeria and how they have soared or plummeted.  If the value of Naira keeps resorting to the lowest points there are possible vast rise to inflation. Inflation directly impacts the Black Market and would affect performers strictly. This will also result in an exorbitant view of foods and other goodies sold in Naira.

Interest Rates: Another phase of trauma to examine is the interest rate which centers its effect on loans. If the Banks’ interest rate soars to a heated figure it would affect the economy badly, thrusting it to contract and will also result in demeaning the value of Naira.

Government Debt: The Government can also add to the fall of Naira if its debt is way cruel. The National debt can impact the inflow of value into the economy. If these are high, the naira exchange rate will rise in favor of the Naira.

Impacts of the Black Market Exchange Rate of USD to NGN on Nigeria’s Economy

The Nigerian Naira (NGN) and the United States Dollar (USD) are the two important currencies that form Nigeria’s economic landscape. Nigerian Naira (NGN) to United States Dollar (USD) transactions are one of the pillars of the country’s financial stability. However, the black market facilitating NGN to USD transactions poses a serious threat to the stability of the country’s economy. If there is a surge in the number of transactions for USD to Naira through the black market exchange rate, it directly impacts the country’s economy adversely.

What is the black market exchange rate?

Usually, white-collar transactions or legal transactions take place within the formal banking system. Rates for USD to NGN are decided within the formal banking system, and transactions from USD to Naira cannot overpass or underpass the current rates. The black market rate is the unofficial rate at which foreign currencies are traded in the market. 

The black market is not controlled by Central Bank of Nigeria (CBN), and thus there is no control over the transactions or the exchange rates of USD to Naira in the black market. This disparity in the rates of the USD and Naira arises due to the high demand for foreign currencies in the country. 

Let us understand the causes that lead businessmen and individuals to resort to the black market instead of the formal banking system. 

  1. Restrictions and limitations on foreign exchange: When resorting to a formal banking system, there are certain limitations on foreign exchange. Due to this limitation, a shortage of USD arises in the official market. This disparity in demand and supply of the USD causes the USD to surge in price. Moreover, the government has also imposed certain restrictions that further restrict businesses from carrying out the transactions favorably. This is one of the significant reasons for people to resort to the black market for transactions.
  2. Dependency on foreign goods: The economy of Nigeria is highly dependent on imported goods from foreign countries. The United States Dollar is a globally accepted currency, and most international trade takes place via the USD. As the country is highly dependent on imported goods, the trade for the import takes place in USD. Thus, the business needs to opt for USD-to-Naira and Naira-to-USD transactions. 
  3. Corruption and Money Laundering: Corruption and money laundering are a few of the illicit activities that drive the black market. Illicit activities use foreign currency, such as USD, for transactions, and thereby people use the black market to convert money. 

Due to the above-stated reasons, people are often tempted to resort to the black market for USD-to-Naira transactions. As foreign exchange in a formal banking system has limitations and regulations that one needs to follow, transactions only up to a certain limit can take place, and therefore this creates a shortage in government-controlled exchange. Due to limitations in the formal market, the price of USD to Naira increases directly.

Impacts of the Black Market on the Nigerian Economy:

Weakening of the economy: The Nigerian economy is highly dependent on imported goods; thus, due to the changes in the foreign market, there remains instability in the Nigerian economy due to the volatility of the price. Also, the surging USD to Naira rates create inflationary pressure in the market, which disrupts the purchasing power of the customer. 

Uncontrolled parallel economy: The black market is not regulated and controlled by any governing body. Due to this, the transactions taking place here are not controlled, which leads to a non-revenue-generating stream. The black market transactions, therefore, cause great economic hindrances. 

Inequality: As the black market exchange rate keeps fluctuating, the uncertainty makes it difficult to read the foreign market. Also, the black market makes accessibility to foreign exchange easy for individuals, which raises the condition of inequality in Nigeria.

This huge difference in the formal banking foreign exchange rate and the black market exchange rate is mainly due to the supply-demand ratio. This ever-increasing disparity is concerning for the volatile Nigerian economy, as it is dependent on imported goods whose prices depend on foreign exchange rates. 

The Nigerian government is trying to fix the adverse issue of the value of the Naira (NGN) to the US Dollar (USD) and is trying to stabilize the economy. They might look for approaches such as liberalizing the policies for foreign exchange, working towards more provision of transactions, and also working for eroding corruption and illicit activities. 

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