Dollar To Naira Black Market Exchange Rate Today (Aboki Dollar Rate)
As of the time of presenting this report, the exchange rate for a dollar to naira in the varied vicinity of Lagos and Onitsha Parallel Market (Black Market) is N754 to N757.
Exchange Rate Of Dollar To Naira in Black Market Today?
|Dollar to Naira (USD to NGN)||Black Market Exchange Rate Today|
United States Dollar (USD) is a global currency and most foreign exchange transactions and international business take place through the United States Dollar (USD). The Nigerian Naira (NGN) is the national currency of Nigeria. The Nigerian economy is highly dependent on imported goods and foreign business. The main revenue-generating source for Nigeria is the crude oil business, this business in the international markets is usually done through USD as the currency. Therefore, the need for USD to Naira and Naira to USD transactions persists in the international market.
The United States Dollar to the Nigerian Naira exchange plays a significant role in forming the economy of the Nigerian country. But there are certain restrictions and regulations imposed on the exchange process which limit the business and individuals. Due to these limitations and restrictions imposed on the exchange of USD to NGN through the formal banking system; businesses and individuals are tempted to resort to the black market exchange for USD to NGN.
The black market exchange for USD to NGN is thriving for years now and continues to provide an alternative most used platform for exchange due to the difference in supply and demand through the formal banking system. Also, illicit activities are carried out using foreign currency which further increases the need to rely on the black market exchange.
Due to all the above states reasons the black market exchange is often used by people as a medium for currency exchange. However, the currency exchange rates have a huge difference between the normal banking system and the black market exchange, leading to instability in the economy and creating disruption.
The black market exchange rates for USD to NGN are almost two times as compared to that in the official Nigerian Foreign Exchange system. This scenario creates the weakening of the Nigerian Naira compared to the US Dollars, as more NGN is exchanged for the price of one dollar.
The weakening of the Nigerian economy may lead to price inflation, affect the purchasing power, and creates a great disparity among the other foreign currencies as well. Which weakens the country’s overall economy and causes great distraught.
Now that we have already understood what is the impact of the black market exchange rates on the USD to NGN transactions on the economy of Nigeria and how that is caused, let us understand what solutions can be applied and the implications of the said solutions.
Black Market is an unregulated and unofficial exchange system that is an unguarded backdoor to the country’s economy. All the money that is exchanged through the black market does not generate revenue for the country’s government. Also, as there is nobody to look out for those transactions, it acts as a fearless medium to carry out illicit activities.
To overcome these issues, the Nigerian government should work towards reforming its rules and regulations for foreign exchange transactions. Following are the few steps that can be taken by the Nigerian government to strengthen the foreign exchange system:
- Increase the liquidity of the USD to NGN and also enhance the market efficiency; with more liquidity, the business and individuals might be able to carry out large transactions without much to worry.
- Relaxation on the rules and regulations. Having a formal system for exchange gives users the feeling of safety for exchange and with relaxed rules and regulations, users feel liberated from too much process and will stick to using the formal banking system.
Furthermore, the Nigerian government can also do the following activities to literate people and bring them awareness:
- Educate the citizens on financial literacy so that they can understand the importance and significance of going through formal banking and using the Foreign currency exchange system.
- Bring to them the implications of trading via the black market exchange system and possible threats.
- Lack of knowledge on how to use the national trading system is one of the setbacks in people using it. Hence people should be taught the process to use the National trading system.
As already mentioned the United States Dollars (USD) to the Nigerian Naira (NGN) exchange rates on the black market creates a huge disparity in the NGN to USD ratio. As of 10th June 202, the official rate of USD to NGN was about 1 USD = 465NGN, and on the black market, it was about 1 USD = 763 NGN. This difference does not favor the Nigerian economy.
Educating the population about the impacts of trading in the black market, and controlling the illicit activities in the country are a few of the basic steps the Nigerian government can take. This issue needs to be fixed from the roots for its impact to be beneficial in the long go. Once treated well, the Nigerian economy will have a positive and stable economy free from the threats of the black market exchange rate.See Dollar(USD) to Naira Black Market Exchange Rate Today!
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