How does the black market affect the exchange rate between euro and naira today?

3 answers

• Tychsen CurrieJan 18, 2024 · 2 years ago
  The black market can have a significant impact on the exchange rate between the euro and the naira. In countries with strict currency controls or unstable economies, the black market often emerges as an alternative source for foreign currency. Due to the illegal nature of these transactions, the exchange rate in the black market is usually higher than the official exchange rate. This can lead to a depreciation of the naira against the euro, as people prefer to exchange their currency in the black market to get a better rate. However, it's important to note that the black market exchange rate may not accurately reflect the true value of the currency and can be highly volatile.
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• Luan Gustavo Altruda FilipovOct 29, 2021 · 4 years ago
  The black market plays a significant role in determining the exchange rate between the euro and the naira today. As the demand for foreign currency increases, particularly in countries with limited access to foreign exchange, the black market provides an alternative avenue for individuals and businesses to acquire euros. The exchange rate in the black market is usually higher than the official rate due to the scarcity of foreign currency. This can lead to a depreciation of the naira against the euro, as more people opt to exchange their naira in the black market. However, it's important to note that relying on the black market for currency exchange carries risks, as the rates can be highly volatile and there is no regulatory oversight.
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• DusanMar 21, 2021 · 4 years ago
  The impact of the black market on the exchange rate between the euro and the naira today is significant. The black market operates outside of the official channels and is driven by supply and demand dynamics. When there is a high demand for euros and limited supply through official channels, the black market exchange rate tends to be higher. This can lead to a depreciation of the naira against the euro, as individuals and businesses seek to acquire euros through the black market. However, it's important to note that relying on the black market for currency exchange is illegal and carries risks. It's always recommended to use official channels for currency exchange to ensure transparency and avoid potential legal issues.
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