How Naira Fares Against Dollar in the Black Market 

iexclusivenews – The naira is the official currency of Nigeria, but many Nigerians also use the US dollar for various transactions.

The exchange rate between the two currencies fluctuates depending on the supply and demand of dollars in the market.

iexclusivenews has compiled the latest data on the naira black market exchange rate in Nigeria today, as well as the official rates from the Central Bank of Nigeria (CBN) and the Investors and Exporters (I&E) window.

What is the Black Market and How Does it Work?

The black market, also known as the parallel market, is an informal sector where people buy and sell foreign currencies without the regulation or oversight of the CBN.

The black market rates are usually higher than the official rates, as they reflect the scarcity and demand of dollars in the market.

The black market rates also vary from one location to another, depending on the availability of dollars and the bargaining power of the buyers and sellers.

The black market is popular among Nigerians who need dollars for various purposes, such as travel, education, medical, or business.

However, the CBN does not recognize or endorse the black market, and advises anyone who needs forex to go to their bank or the I&E window, which are the only authorized sources of forex in the country.

What is the Naira Black Market Exchange Rate Today?

According to iexclusivenews, the naira black market exchange rate in Nigeria today, Monday February 19, 2024, is as follows:

– Buying Rate: N1670 per $1

– Selling Rate: N1690 per $1

This means that if you want to buy one dollar in the black market, you will need to pay N1690, and if you want to sell one dollar, you will get N1670.

However, these rates may change within hours, depending on the availability and demand of dollars in the market.

The naira black market exchange rate in Lagos, the commercial capital of Nigeria, is N1690 per $1 as of 12.00pm today.

This is the same as the average rate for the whole country.

How Does the Naira Compare to the Dollar in the Official Markets?

The official markets for forex in Nigeria are the CBN and the I&E window.

The CBN is the apex bank that regulates the monetary policy and the supply of forex in the country.

The I&E window is a platform that allows investors and exporters to trade forex at market-determined rates.

According to iexclusivenews, the naira official exchange rate in Nigeria today, Monday February 19, 2024, is as follows:

– CBN Rate: N1537 per $1

– I&E Window Rate: N1537.57 per $1

This means that the CBN sells one dollar for N1537, and the I&E window trades one dollar for N1537.57.

The CBN rate is fixed, while the I&E window rate is flexible and changes according to the market forces.

The naira official exchange rate is much lower than the black market rate, as the CBN tries to maintain the stability and value of the naira.

However, the CBN has limited forex reserves and cannot meet the high demand for dollars in the country.

This creates a gap between the official and the black market rates, and encourages people to seek alternative sources of forex.

What Factors Affect the Naira Exchange Rate?

The naira exchange rate is influenced by many factors, both internal and external. Some of the major factors are:

– Inflation Rates: Inflation is the general increase in the prices of goods and services over time.

Inflation reduces the purchasing power and value of the naira, and makes it less attractive to foreign investors.

Inflation also affects the black market exchange rate, as people demand more dollars to hedge against the rising cost of living.

If the Nigerian economy can be stabilized and inflation is controlled, the naira will benefit; however,

if the naira continues to depreciate, it may indicate that food and other necessities are becoming more expensive daily.

– Interest Rates: Interest rates are the cost of borrowing money from banks or other financial institutions.

Interest rates affect the economic growth and the demand for forex in the country.

If the interest rate is high, it discourages borrowing and spending, and slows down the economic activity.

This reduces the demand for dollars and strengthens the naira.

If the interest rate is low, it encourages borrowing and spending, and stimulates the economic activity.

This increases the demand for dollars and weakens the naira.

– Government Debt: Government debt is the amount of money that the government owes to its creditors, both domestic and foreign. Government debt affects the investor confidence and the inflow of foreign capital into the country.

If the government debt is high, it signals that the government is spending more than it earns, and may have difficulty repaying its obligations.

This reduces the investor confidence and the inflow of dollars into the country. This lowers the supply of dollars and increases the black market rate.

If the government debt is low, it signals that the government is managing its finances well, and can meet its obligations.

This increases the investor confidence and the inflow of dollars into the country. This raises the supply of dollars and lowers the black market rate.

– Speculators: Speculators are people who buy and sell forex based on their expectations of future price movements.

Speculators can affect the naira exchange rate by creating artificial demand or supply of dollars in the market.

If speculators anticipate that the naira will depreciate in the future, they will buy more dollars and hoard them, hoping to sell them at a higher price later.

This reduces the availability of dollars and increases the black market rate.

If speculators anticipate that the naira will appreciate in the future, they will sell more dollars and release them into the market, hoping to buy them back at a lower price later.

This increases the availability of dollars and lowers the black market rate.

What is the Trend of the Naira Exchange Rate in the Past Week?

The naira exchange rate has been volatile in the past week, as the market reacts to various economic and political developments in the country and the world.

According to iexclusivenews, the naira black market sell rate took values between N1480 and N1655 with an average of N1557.33 in the last 7 days, between 12/02/2024 and 18/02/2024.

The naira exchange rate opened at N1455 per $1 in the parallel market today, Monday February 19, 2024, but rose to N1690 per $1 by 12.00pm, as the demand for dollars increased.

The naira exchange rate also opened at N1537.57 per $1 in the I&E window today, Monday February 19, 2024, showing a slight appreciation from the previous closing rate of N1538.33 per $1 on Friday February 16, 2024.

The naira exchange rate remained unchanged at N1537 per $1 in the CBN today, Monday February 19, 2024, as the apex bank continues to intervene in the forex market to support the naira.

Disclaimer

iexclusivenews Nigeria does not determine or set currency exchange rates. The official NAFEX rates are obtained from the website of the FMDQOTC.

Parallel market rates (black market rates) are obtained from various sources, including online media outlets.

The rates are indicative and may differ from the actual market rates. iexclusivenews Nigeria is not liable for any loss or damage arising from the use of these rates.