Foreign Exchange Speculators Count Losses as Naira Gains Ground on Black Market
Foreign exchange (FX) speculators in Nigeria are facing significant losses as the US dollar has witnessed an 8.39 percent drop in value on the parallel market due to government-implemented policies.
The Nigerian naira, which had hit a low of N1,310 per dollar, has shown remarkable strength, now trading at N1,200 per US dollar on the black market.
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This sudden shift in currency dynamics is a result of the Nigerian government’s efforts to digitize FX transactions and curb speculative demands and hoarding of foreign currency in cash.
Dollar to Naira black market exchange rate today October 27, 2023
Many FX speculators who had purchased dollars at higher rates are now finding themselves at a disadvantage.
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One black market operator at the Lagos airport lamented the situation, saying, “I bought dollars at N1,285, and I am now selling at N1,200. Do you know how much I am losing? Everything is government. If the dollar is going up, it is the government, if it is coming down, it is the government.”
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The government’s move to digitalize foreign exchange transactions aims to bring more transparency and efficiency to the currency market while discouraging speculative practices. These policies have had a noticeable impact on the black market, where rates have become more favorable for those in need of foreign currency.
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The naira’s resurgence is seen as a positive development for the Nigerian economy, as it can help stabilize prices, boost investor confidence, and reduce the country’s reliance on the black market for FX transactions. The government’s efforts to promote a more controlled and transparent FX system are intended to benefit both businesses and individuals alike.
The recent fluctuations in the value of the US dollar on the parallel market highlight the influence of government policies on Nigeria’s FX market. As the government continues to implement digitalization measures, it remains to be seen how the currency.
