The US dollar has been gaining more value over the Nigerian naira in the black market, which is also called the parallel market, where foreign currencies are exchanged without the government’s approval. Many Nigerians prefer to use the black market rate as a reference because it is easier to obtain and more reflective of the actual situation than the official rate.
What is the Dollar to Naira Today Black Market Rate?
According to bureaux de change (BDCs) operators, the black market exchange rate of the dollar to naira as of September 30, 2023 is as follows:
- Buying: 997 NGN for $1
- Selling: 1000 NGN for $1
This means that black market dealers sell one US dollar for 1000 naira and buy one US dollar for 997 naira from their customers.
The black market rate is much higher than the official rate set by the Central Bank of Nigeria (CBN) and the bank rate offered by authorized dealers, such as banks and bureaux de change (BDCs).
According to our reporter the CBN exchange rate of the dollar to naira as of September 30, 2023 was:
- Buying: 770.50 NGN for $1
- Selling: 772.50 NGN for $1
This means that the CBN sells one US dollar for 772.50 naira and buys one US dollar for 770.50 naira from authorized dealers.
According to available data, the average bank exchange rate of the dollar to naira as of September 30, 2023 was:
- Buying: 790 NGN for $1
- Selling: 782.20 NGN for $1
This means that banks sell one US dollar for 782.20 naira and buy one US dollar for 790 naira from their customers.
Why is the Naira Depreciating Against the Dollar?
The gap between the black market rate and the official rate reflects the scarcity and volatility of foreign exchange in Nigeria, which is caused by various factors, such as:
Oil prices: Nigeria is an oildependent economy that relies on oil exports for most of its foreign exchange earnings. A fall in oil prices reduces Nigeria’s forex inflow and affects its balance of payments.
Forex demand: Nigeria has a high demand for forex to import goods and services, pay debts, repatriate profits, and meet other obligations. The demand for forex often exceeds the supply, creating pressure on the naira.
Forex supply: Nigeria has a limited supply of forex from its oil exports, nonoil exports, remittances, investments, loans, and reserves. The supply of forex is often affected by external shocks, such as oil price fluctuations, global economic slowdowns, sanctions, and currency wars.
CBN policies: The CBN implements various policies and interventions to manage the exchange rate of the naira and ensure stability in the forex market. Some of these policies include the multiple exchange rate system, the forex ban list, the forex allocation system, the forex intervention program, and the forex futures market.
Market sentiments: The exchange rate of the naira is also influenced by market sentiments, such as expectations, confidence, speculation, rumors, and emotions. Market sentiments can affect the demand and supply of forex, as well as the behavior of forex dealers and customers.
The exchange rate of the dollar to naira is a key indicator of Nigeria’s economic performance and stability. The exchange rate varies across different markets, such as the CBN, bank, and black market. The CBN and bank rate are the official rates that are regulated by the CBN, while the black market rate is the unofficial rate that is determined by market forces.
As of September 30, 2023, the CBN exchange rate of the dollar to naira was 772.50 NGN for $1, the bank exchange rate was 782.20 NGN for $1, and the black market rate was 1000 NGN for $1.