Dollar to Naira Black Market Exchange Rate: What Is the Current Value?
Dollar to Naira Black Market Exchange Rate: What Is the Current Value?
Nigerian citizens are facing an economic crisis. The Nigerian naira is experiencing one of the worst devaluations in its history, and the country has been plagued with high inflation rates for years now. The Central Bank of Nigeria's (CBN) decision to reduce interest rates on dollar deposits will not help stem capital flight, as it is already too late for this measure to take effect. This blog post goes over what led up to this point, why there is a currency black market despite CBN efforts, and how Nigerians can protect themselves from these harsh conditions.
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Section 1: The Naira's Value Falls
The Naira's value has been falling steadily since the beginning of 2016, and it has been getting worse since July. The value of the Naira against the Dollar has fallen from approximately NGN 520 to NGN 570 today. This devaluation is a direct result of the central bank's decision to decrease the interest rate on dollar deposits from 6.5% to 6.0%.
The central bank is also currently printing NGN 2.1 trillion per month, which is equivalent to approximately $50 billion per month. This is not only causing an inflation rate of approximately 13.7% per year, but also a loss of approximately $2.8 billion in purchasing power.
Section 2: The Central Bank's Efforts to Cope with the Naira's Value
The CBN has been trying to stem capital flight by allowing for the increase of the dollar's exchange rate to NGN 4,800,
How the Dollar to Naira Black Market Exchange Rate Came to Be
In a nutshell, the dollar to naira black market exchange rate is the price of the naira at which the currency can be exchanged for a dollar in a private transaction. The current exchange rate is very unstable, fluctuating at a rapid pace. The naira has been devaluing and strengthening against the dollar since the beginning of the year, and the current value of the naira is almost double that of what it was at the beginning of the year. The market value of the naira is calculated based on the average exchange rate over a period of time.
The recent devaluation of the naira is largely due to the high rate of inflation. The inflation rate in Nigeria is the highest in the world, and it is projected to reach a rate of 50 percent by year end. This means that every month, the average naira will be worth less and less, and eventually, it will no longer be possible to exchange for a dollar.
How to Protect Yourself from the Economy Crisis
The devaluation of the naira has caused many Nigerians to look for ways to protect themselves from this crisis. There are ways that you can protect yourself from the economic crisis, which we will discuss below.
The first thing that you can do is to invest in foreign currencies. There are many foreign exchange (FX) markets where you can buy and sell foreign currencies, and the market is not regulated by any central bank or government. If you buy and sell currencies in this way, you can take advantage of the different exchange rates that are available to you.
There are two ways that you can invest in foreign currencies. The first way is to buy foreign currencies in the black market and the second is to use an exchange-traded fund (ETF). The best ETF to invest in is the iShares MSCI Emerging Markets ETF (EEM). This ETF tracks the performance of emerging market stocks around the world.
The second way to invest in foreign currencies
Conclusion
The naira was pegged to the dollar for over 20 years, but with the devaluation of the naira and the subsequent decline of the dollar, there is now a black market for exchanging naira for dollar. Nigerians are suffering from a loss of value, and the currency exchange rate has now reached an all-time high. The naira has been devalued by as much as 100 percent in the past year, and the black market rate is currently over N500 per dollar.
The reason for the devaluation of the naira has been the capital outflow from the country due to a combination of economic problems and political unrest. The central bank's decision to lower the interest rate on dollar deposits will not stop the capital flight, as the naira is now overvalued and the banks will continue to offer higher interest rates on dollars. Nigerians are now looking for ways to protect themselves from this situation.
