The value of the Nigerian Naira against the U.S. Dollar continues to fluctuate, with significant variations between the official exchange rate and the black market rate.
Below is an update on the current exchange rates for today.
Black Market (Parallel Market) Exchange Rate
According to information obtained from Bureau De Change (BDC) operators in Lagos and other major trading hubs, the exchange rate for the U.S. dollar on the black market is as follows:
Buying Rate: ₦1,620 per $1
Selling Rate: ₦1,630 per $1
It is important to note that the Central Bank of Nigeria (CBN) does not recognize transactions carried out in the parallel market. The regulatory body has consistently warned individuals and businesses against trading forex outside the official channels, emphasizing that all foreign exchange transactions should be conducted through authorized financial institutions, such as commercial banks.
CBN Official Exchange Rate
The official exchange rate set by the Central Bank of Nigeria (CBN) is significantly lower than what is obtainable in the parallel market. As of today, the official exchange rate is:
Highest Rate: ₦1,538 per $1
Lowest Rate: ₦1,520 per $1
While the official exchange rate reflects CBN’s efforts to stabilize the forex market, limited dollar supply at commercial banks has driven many individuals and businesses toward the black market, where rates are determined by demand and supply.
Factors Influencing the Exchange Rate
Several factors contribute to the continuous depreciation of the Naira, including:
Forex Scarcity: Limited availability of U.S. dollars in the official market forces businesses and individuals to rely on the black market.
Inflation: Rising inflation weakens the purchasing power of the Naira, making foreign currencies more expensive.
Foreign Investment Levels: Low foreign direct investment (FDI) and portfolio investment inflows reduce forex reserves, impacting exchange rates.
Economic Policies: Government policies, including restrictions on forex access and trade regulations, influence the exchange rate movement.
Global Economic Trends: International market conditions, oil price fluctuations, and global monetary policies affect Nigeria’s forex reserves and exchange rate stability.
Advice for Forex Traders and Businesses
If you require forex for international transactions, always check with your bank first before turning to the black market.
Be cautious when dealing in the parallel market, as rates fluctuate frequently, and the risks of scams and counterfeit currency exist.
Consider alternative financial strategies, such as diversifying assets, to hedge against forex instability.
Exchange rates are highly volatile, and the figures quoted today may change within hours. Always verify rates from multiple sources before proceeding with forex transactions.