The exchange rate between the US Dollar and the Nigerian Naira has continued to fluctuate, particularly in the parallel market, also known as the black market. On Friday, 6th September 2024, sources from Bureau De Change (BDC) operators in Lagos reported that the buying and selling rates for the Dollar against the Naira were as follows:
- Buying Rate: ₦1660 per dollar
- Selling Rate: ₦1675 per dollar
This indicates a widening gap between the official exchange rate provided by the Central Bank of Nigeria (CBN) and the black market rate. While the parallel market continues to be a significant factor in Nigeria’s forex trading landscape, the CBN does not officially recognize this market. It has repeatedly advised individuals and businesses seeking foreign exchange to approach their respective banks for legitimate transactions.
CBN Exchange Rate
On the same day, the official CBN rate for the Dollar to Naira stood at:
- Buying Rate: ₦1620 per dollar
- Selling Rate: ₦1621 per dollar
The difference between the CBN and black market rates highlights the ongoing challenges in Nigeria’s foreign exchange market. Many Nigerians resort to the parallel market due to difficulties in accessing foreign currency through official channels, especially for personal and business transactions.
Discrepancies Between the Markets
The exchange rates in the black market are significantly higher than the official CBN rates, reflecting the high demand for foreign currency amidst limited supply in the formal banking sector. This discrepancy has led to an increased reliance on the black market by individuals and businesses who struggle to obtain forex through official means.
Despite the higher rates, there are variations depending on location and market conditions. Therefore, the actual rate at which individuals may buy or sell dollars in the parallel market could be slightly different from the rates captured on Friday, 6th September 2024.
CBN’s Stance on the Black Market
The Central Bank of Nigeria has maintained its stance against the use of the black market for forex transactions. The CBN continues to implement policies aimed at stabilizing the official exchange rate and curbing activities in the parallel market. The bank has encouraged Nigerians to make use of legitimate banking channels, assuring that forex will be made available through these regulated outlets.
In recent times, the CBN has introduced several interventions to ease the pressure on Nigeria’s forex reserves, including measures aimed at increasing supply through foreign direct investments and diaspora remittances. However, the disparity between the official and parallel markets remains a key concern.
With the Naira’s value under pressure, both in the official and black markets, the exchange rate continues to be a critical issue in Nigeria’s economic landscape. While the CBN’s official rates provide a more stable view of the currency’s value, the black market remains an alternative for those seeking quicker access to dollars, albeit at a higher cost.
As the Naira continues to fluctuate, individuals and businesses are urged to remain cautious when engaging in forex transactions and to prioritize official channels for their currency needs.
