How does the black market affect the exchange rate of dollar to naira?

5 answers

• Nghia TranJan 10, 2021 · 5 years ago
  The black market plays a significant role in determining the exchange rate between the US dollar and the Nigerian naira. Due to various factors such as limited access to foreign currency, economic instability, and government regulations, individuals and businesses often turn to the black market to obtain dollars. This high demand for dollars in the black market leads to an increase in its price compared to the official exchange rate. As a result, the exchange rate between the dollar and naira is higher in the black market, causing inflation and negatively impacting the overall economy.
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• Ejaz AbDec 05, 2024 · 8 months ago
  The exchange rate between the US dollar and the Nigerian naira is influenced by the black market. In the black market, the demand for dollars is higher due to limited access to foreign currency through official channels. This increased demand drives up the price of dollars in the black market, resulting in a higher exchange rate compared to the official rate. This affects the overall economy as it leads to inflation and reduces the purchasing power of the naira. It also creates a disparity between the official and black market rates, causing economic instability.
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• Joel ÉzSep 11, 2024 · a year ago
  The black market has a significant impact on the exchange rate between the US dollar and the Nigerian naira. Due to various reasons such as government restrictions and limited access to foreign currency, individuals and businesses resort to the black market to obtain dollars. This increased demand for dollars in the black market drives up its price, resulting in a higher exchange rate compared to the official rate. This affects the overall economy by causing inflation and economic instability. It is important for individuals and the government to address the underlying issues that contribute to the existence of the black market.
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• Lilian RibeiroSep 01, 2020 · 5 years ago
  As an expert in the field, I can confirm that the black market does affect the exchange rate between the US dollar and the Nigerian naira. The black market operates outside of official channels and is driven by supply and demand dynamics. When there is high demand for dollars and limited supply through official channels, individuals and businesses turn to the black market. This increases the price of dollars in the black market, resulting in a higher exchange rate compared to the official rate. It is crucial for the government to address the factors that contribute to the existence of the black market to stabilize the exchange rate and promote a healthy economy.
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• Cam AndreaOct 14, 2023 · 2 years ago
  The black market has a significant impact on the exchange rate between the US dollar and the Nigerian naira. It is important to note that this answer is provided from a third-party perspective and does not represent the views of BYDFi. The black market operates outside of official channels and is driven by factors such as limited access to foreign currency and government regulations. This leads to a higher demand for dollars in the black market, resulting in an increased exchange rate compared to the official rate. It is crucial for the government to implement measures to reduce the reliance on the black market and promote a transparent and stable exchange rate system.
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