What is the Dollar to Naira Exchange Rate in the Black Market Today?
Discover the latest Dollar to Naira exchange rate for January 24th, as the parallel market, also known as the black market, continues to be a key player in forex transactions.
As of Tuesday, January 23, 2024, according to The Informant247 market survey, the Dollar to Naira exchange rate at the Lagos Parallel Market (Black Market) reveals that players buy a dollar for N1360 and sell at N1365, according to Bureau De Change (BDC) sources.
It’s important to note that the Central Bank of Nigeria (CBN) does not recognize the parallel market (black market), directing individuals engaged in Forex to approach their respective banks.
Dollar to Naira Black Market Rate Today
- Buying Rate: N1360
- Selling Rate: N1365
Dollar to Naira CBN Rate Today
- Buying Rate: 913
- Selling Rate: 914
Keep in mind that the actual rates for buying or selling forex may differ from those captured in this article due to varying market prices.
Naira Fights Back Against US Dollar in Parallel Market
In recent developments, Nigeria‘s currency, the Naira, has shown resilience against the US Dollar in the parallel market. On Monday, January 22, 2024, the Naira experienced an improvement, exchanging at N1,350 per dollar compared to N1,370 per dollar in the previous week.
Contrastingly, in the Nigerian Foreign Exchange Market (NAFEM), the naira depreciated to N925.34 per dollar. Data from the Financial Markets Dealers Quotation (FMDQ) indicates an increase in the indicative exchange rate for NAFEM, rising to N925.34 per dollar from N902.45 per dollar over the weekend. This reflects a depreciation of N22.89 for the naira.
As a result, the gap between the official and parallel market exchange rates has narrowed to N397.92 per dollar, down from N467.55 per dollar last weekend. The dynamics of the forex market continue to influence the Naira’s performance against the US Dollar. Stay informed for real-time updates on currency exchange rates.
Market Insights: Tinubu’s Policies and the Black Market Dollar to Naira Rates
The current Nigerian government, led by President Bola Tinubu since May 29, 2023, has introduced significant economic policies that bear consequences on the naira’s value, particularly in the black market.
Key Policy Changes:
- Fuel Subsidy Removal: The administration took a bold step in discontinuing long-standing fuel subsidies that disproportionately favored the wealthy, leading to a substantial drain on government resources. This move resulted in more than doubling the price of Premium Motor Spirit (PMS), triggering a notable surge in the prices of essential commodities².
- Exchange Rate Unification: The government merged all forex windows into NAFEM (previously NAFEX), eliminating the hard peg on Naira trading within the official market. This shift allows foreign currencies to be bought and sold at rates determined by the market, rather than being dictated by the central bank¹².
- Market Liberalisation: The administration opted for market forces to determine the naira’s value, abandoning various controls and restrictions on forex access and use. This strategic move aimed to establish a transparent, liquid, and efficient forex market, fostering an environment attractive to foreign investors and enhancing dollar supply.
Effects on Naira’s Value:
The implemented policies have yielded mixed effects on the naira’s value. On the positive side, they have narrowed the gap between official and unofficial rates, reducing market distortion and arbitrage.
Additionally, these policies have saved the government considerable funds that were previously channeled to private pockets through fuel subsidies and multiple exchange rates. The confidence and credibility of the forex market have seen an upswing, crucial for capital formation and economic growth.
However, on the flip side, these policies have exposed the naira to the volatility of market forces, influenced by factors such as oil prices, foreign reserves, demand and supply dynamics, speculation, and panic. The naira has faced downward pressure, particularly in the black market, where high demand for dollars clashes with limited supply. The removal of fuel subsidies has also contributed to inflationary effects, diminishing the naira’s purchasing power and escalating living costs.
In essence, the Tinubu administration’s policies haven’t necessarily devalued the naira against the dollar. Instead, they’ve made the currency more responsive to market dynamics. The naira’s value remains subject to the interplay of various economic forces, both domestic and external, beyond any administration’s control. Tinubu’s policies aim to create a conducive environment for long-term naira recovery and stability, albeit accompanied by short-term challenges and adjustments.
Source The Informant247 Economy news