What are the factors influencing the black market exchange rate between dollar and naira?

3 answers

• Amir2 GhJun 11, 2024 · a year ago
  The black market exchange rate between the US dollar and the Nigerian naira is influenced by various factors. One of the main factors is the demand and supply dynamics of the two currencies. When there is a higher demand for the US dollar compared to the supply, the exchange rate tends to increase. On the other hand, when there is a higher supply of US dollars compared to the demand, the exchange rate tends to decrease. Other factors that influence the black market exchange rate include inflation rates, interest rates, political stability, and economic performance of both countries. Additionally, events such as changes in government policies, economic sanctions, and global economic trends can also have a significant impact on the exchange rate between the dollar and naira in the black market. Overall, the black market exchange rate is a reflection of the market forces and various economic factors at play.
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• dstrbtwJul 14, 2024 · a year ago
  The black market exchange rate between the US dollar and the Nigerian naira is influenced by a combination of economic, political, and social factors. Economic factors such as inflation, interest rates, and trade imbalances can affect the demand and supply of both currencies, leading to fluctuations in the exchange rate. Political stability and government policies also play a crucial role in determining the black market exchange rate. Any changes in government policies, such as currency controls or foreign exchange regulations, can have a significant impact on the exchange rate. Additionally, social factors such as public confidence in the local currency and the overall economic situation of the country can also influence the black market exchange rate. It's important to note that the black market exchange rate may not always reflect the true value of the currencies, as it is driven by market dynamics and speculative activities.
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• EugeneBUOct 08, 2023 · 2 years ago
  When it comes to the black market exchange rate between the US dollar and the Nigerian naira, several factors come into play. Demand and supply are key drivers of the exchange rate in the black market. If there is a high demand for the US dollar and limited supply, the exchange rate will be higher. On the other hand, if there is a surplus of US dollars and low demand, the exchange rate will be lower. In addition to demand and supply, other factors such as inflation, interest rates, economic stability, and government policies can also influence the black market exchange rate. For example, if there is high inflation in Nigeria, it can lead to a depreciation of the naira against the dollar in the black market. Similarly, if the government implements policies that restrict access to foreign currency, it can also impact the exchange rate. Overall, the black market exchange rate is a reflection of the market forces and various economic factors that affect the demand and supply of the two currencies.
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