Dollars to Naira black market definition
You’ve probably just received a credit alert from the United States and are thinking of converting your money from Dollars to Naira through the black market. Sit back and feel relaxed if this is the case with you, as this piece has been prepared to summarize all that has to do with the Dollars to Naira to black market definition and concept. Let’s headways into the topic starting from the definition.
What are Dollars to Naira Black Market?
Any platform where dollars can be exchanged for naira illegally may be referred to as a dollar-to-naira black market. Such platforms don’t trade or exchange dollars for naira in an institutionalized way.
Black markets dealing with the exchange of currencies are not also limited to dollars and nairas, they can exchange several other currencies. Many prefer to exchange currencies in black markets, considering the several advantages that come with this in contrast to what banks will offer, making it illegal stuff.
There is more to the story behind Dollars to Naira. For a better knowledge of how the conversion of Dollars to Naira or Naira to any other currency works, it is ideal that you take some time to learn about this, after which we will go to explore other aspects of this topic.
Nigeria has been in existence for over 60 years back, but the country had no defined currency of its own until 1973. It would be recalled that many years before she gained her independence in 1960, Nigeria was colonized by the British colonial rulers – Sir Fredrick Lugard being the first ruler of the country at the time.
In 1973, several years after the amalgamation of the country, her monetary system was decimalized to be NGN (Nigerian Naira) in lieu of the Nigerian pound used at the time of its colony.
For the first ten years after having her currency, the rate of Naira to Dollar was so favorable to Nigerians that it took about 2 US Dollars to make an NGN. The country’s currency notes contain the images of most of her prominent political leaders like Nnamdi Azikiwe and Abubakar Tafawa Balewa.
The devaluation of the Naira started after the first ten years of introducing it in the country. As obtained from one source, the demand for the country’s export is one factor contributing to the decline of NGN. There are several other reasons why the currency keeps depreciating over time.
Why black market?
The number of people preferring to exchange currencies via black markets over banks keeps increasing apparently because they enjoy some benefits that banks may not offer them. Here are some of the reasons many claims to prefer black market dollars to a naira exchange.
- Employment Opportunities
Considering the present state of Nigeria as a case study, employment is a problem most people have to solve on their own. The fact that anyone can start a black market business unlike white-collar bank jobs is one reason more people seem to choose the black market over banks.
- Exchange Rate. You get more money compared to what banks give
As it stands, one USD is worth about 710 times more than NGN. This does not mean you’ll get the same rate when you go to exchange your currency in the bank or withdraw dollars sent to you in Naira.
While banks may exchange a dollar for NGN for you at around N433.72 according to a source, the black market rate of a dollar is between N700 – sometimes N740 as gathered from another source.
This is the reason most people think the black market exchange rate is the best.
- They are more informative
We gathered that black markets in exchanging currencies tend to provide patrons with a more accurate reflection of a country’s economy compared to the official exchange rate.
This is the reason you’ll not get the same exchange rate you learned about in the news in banks.
Oftentimes, black markets or shadow markets as you may see fit is established for the purpose of trading goods prohibited by the government of any given country. But this is not the case with the exchange of currencies because it’s not prohibited – the black market is only an illegal way of exchanging it.
Why should you not convert with black market?
Certainly, this is not a legal way to exchange your currency, which could attract some demerits on your part as a patron. Some of these demerits may include:
- The risk of fraud, since it’s not controlled by the government. This could especially be the case when the exchange of money is done or processed online.
- The chances of violence in markets like this are high.
- One may get penalized for getting some stuff through the black market
In a nutshell, that it’s been tagged an illegal market is one reason you should avoid black markets.
How to transfer dollars to Naira without changing it?
While some think this is not possible, many have been practicing it so the value of the money sent won’t be devalued when it gets into the country.
In case you earn in dollars (in a foreign country) and would like to send some money to someone in Nigeria without changing it, the receiver should be asked to open a domiciliary account with any commercial bank in the country.
When this has been done he or she will receive the money as sent.
Frequently Asked Questions
Let’s quickly examine some commonly asked questions associated with the given topic.
Can PayPal Convert Dollar to Naira?
Yes, there is this feature on Paypal.
However, some fees are charged.
Where to convert Dollars to Naira in Nigeria?
This can be done in any random commercial bank in Nigeria. What I would advise is for you not to attempt to exchange your currency online as you may be exposed to the risk of losing it that way.
Naira to Dollar Exchange rate today
A dollar is now N710 in Nigeria. This is not constant and you can expect to see the rate change in the next few weeks. As a result, we have prepared a valid source from whence you can always get the live currency rate from any currency to the other. Click here to check it out.
