The exchange rate between the US Dollar (USD) and Nigerian Naira (NGN) continues to fluctuate, with notable differences between the official market rate set by the Central Bank of Nigeria (CBN) and the parallel (black) market rates.......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
Black Market (Parallel Market) Exchange Rate
At the Lagos Parallel Market, also known as the black market, foreign exchange traders are currently buying one US dollar at ₦1,575 and selling it at ₦1,585. These rates are sourced from Bureau De Change (BDC) operators who engage in unofficial currency transactions outside the banking system.
CBN Official Exchange Rate
The Central Bank of Nigeria (CBN) maintains a regulated exchange rate for financial institutions and official transactions. Based on recent data:
- The highest recorded exchange rate for the dollar stands at ₦1,552 per USD
- The lowest rate observed is ₦1,512 per USD
The CBN does not recognize or support the black market, advising individuals and businesses seeking foreign exchange (forex) to obtain their funds through licensed financial institutions such as banks.
Factors Influencing the Exchange Rate
Several economic and market conditions contribute to the fluctuations in Nigeria’s forex market, including:
- Dollar Supply and Demand: A shortage of forex liquidity can push black market rates higher, while an increased supply from CBN interventions or foreign inflows can stabilize the naira.
- Inflation and Economic Policies: High inflation rates and policy decisions from monetary authorities significantly impact the value of the naira.
- Global Economic Trends: The strength of the US dollar in international markets, crude oil prices, and foreign direct investment flows all play a role in determining the naira’s performance.
- CBN Regulations and Policies: Restrictions on forex transactions, such as bans on certain imports or tighter controls on foreign remittances, can create fluctuations in the black market rates.
Exchange rates are subject to constant fluctuations, and the rates at which individuals or businesses buy and sell forex may differ from those listed above. It is advisable to consult multiple sources or directly contact banks and financial institutions for the most accurate and up-to-date exchange rates.
