The Dollar to Naira exchange rate in Nigeria’s black market, also referred to as the parallel market or Aboki FX, reflects the unofficial trading values of foreign currency. On Wednesday, 18th September 2024, the exchange rates for buying and selling the U.S. dollar were recorded as follows:
- Buying Rate: N1655
- Selling Rate: N1660
This means that individuals or businesses looking to exchange U.S. dollars for Nigerian naira in the Lagos black market would typically receive N1655 for each dollar they sell, while those purchasing dollars would be charged N1660 for each dollar.
The Black Market Exchange Rate Explained
The black market, often driven by demand and supply, is a space where individuals, small businesses, and large organizations buy and sell foreign currency outside of the official banking system. Bureau De Change (BDC) operators are major players in this market, setting their rates based on fluctuations in the forex market. These rates can vary daily and often differ significantly from the official exchange rates set by the Central Bank of Nigeria (CBN).
Central Bank of Nigeria (CBN) Exchange Rate
On the same date, the official CBN exchange rate for the U.S. dollar to Nigerian naira is as follows:
- Buying Rate: N1651
- Selling Rate: N1652
The official CBN rates are generally lower than the black market rates. The CBN advises individuals and businesses who wish to engage in foreign exchange transactions to use formal financial institutions like banks. The black market, though widespread, operates outside of the CBN’s regulatory framework, and the apex bank does not support these transactions.
Variations in Exchange Rates
It is important to note that exchange rates may vary depending on the location, the dealer, and fluctuations in the currency market. Prices can change multiple times a day, and different BDC operators may offer slightly different rates for buying and selling currency. Thus, the exact rate at which you buy or sell dollars could differ from what is quoted in this article.
Impact of Fuel Subsidy Removal on External Reserves
In 2024/2025, Nigeria’s external reserves could face challenges due to several economic factors, as highlighted by the CBN. The removal of fuel subsidies, along with rising import costs and growing external debt servicing, could potentially slow the growth of the country’s foreign reserves.
However, the CBN maintains a positive outlook for Nigeria’s economy, driven by supportive policies in key sectors such as agriculture and oil, reforms in the foreign exchange market, and the implementation of the Finance Act 2023. These efforts, alongside increased crude oil prices and improved domestic oil production, are expected to bolster the economy.
While there are risks, including lower oil earnings, increased import bills, and the pressure of external debt, the CBN’s economic forecast suggests that capital inflows and remittances will continue to strengthen Nigeria’s external reserves over the coming years.
In summary, while the Dollar to Naira exchange rate in the black market continues to rise, Nigeria’s economic outlook remains cautiously optimistic, with opportunities for growth despite external and internal challenges.