The Nigerian currency, the naira, has done well against the US dollar in the official foreign exchange market. This means that if you exchange naira for dollars through official channels, you get more dollars for your naira.
This improvement happened because more people in the Investors and Exporters market were buying and selling dollars, which increased the supply of dollars. So, there was less pressure on the naira, and it became stronger.
However, in the unofficial market, popularly known as the black market, where people trade money outside of official channels, the story is different. Traders there are still exchanging dollars for naira at a rate that’s higher than N910 for one dollar.
To give you some numbers, in the official market, the naira closed at N738.18 against the dollar on August 30, 2023. This is a big improvement compared to the previous day when it was N775.34 for one dollar. So, the naira got stronger by 4.8%.
This improvement is because more people were buying and selling dollars in the official market. The total amount of money traded went up by 138.57%, from $71.32 million to $170.15 million, in just one day.
But in the unofficial market, the naira didn’t do as well. In a market used mainly by crypto traders, it lost N3 against the dollar, trading at N920 for one dollar, while the previous day it was N917 for one dollar. On the street, the naira also lost N10, closing at N915 for one dollar compared to N905 the day before.
So, there’s a big difference in the exchange rate between the official and unofficial markets, with a gap of N181.82. This gap is far from what the Central Bank of Nigeria (CBN) wanted to achieve by creating a unified exchange rate.
The CBN had told Bureau de Change operators not to sell or buy dollars above certain limits, but it seems like this rule is not being followed in the unofficial market.