As the order of the Central Bank of Nigeria (CBN) remains effective across all commercial banks that no naira debit card carrier is allowed to spend more than 20 USD per month, the forces of demand and supply continue to affect the value of the Nigerian currency.
On Wednesday, May 11, 2022, major forex factors shaped the rate of the US dollar against the naira in different segments of the market.
While the CBN USD/NGN rate remains the same NGN415/USD (sell) and NGN413/NGN, rates at other markets vary according to channels of transaction.
Take a look:
USD/NGN Black Market Rate
1 USD is worth NGN592 (sell) and NGN588/USD at the black market in some parts of Lagos at the time of publication.
The black market rate is driven by government policies and demand and supply. The higher the demand for USD, the higher scarcity is created which pushed the price up.
The price of the dollar will most likely go up as Nigerian politicians prepare for electioneering campaigns ahead of the 2023 elections.
During campaigns, it’s a known fact that moneybags political elites rely mostly on USD, GBP, and EUR to move a large equivalent of naira around.
It’s imperative to note that Lagos rate may not be the same as the Ibadan rate or Abuja rate. Location plays a huge role and who is buying.
For instance, if you’re selling USD to the direct user (consumer), you are most likely going to get a good trade instead of selling to an arbitrage.
P2P Exchange Rate
Since peer-to-peer platforms made incredible entry into the forex market after the 2021 removal of BDC operators from the CBN list of FX buyers, P2P crypto exchange platform like Binance has become another FX trading floor for FX traders in Nigeria.
With a bit of technicality, the P2P rate is higher than other channels. At the time of publication, 605.90 naira could only buy one USD.
Caution: Don’t use P2P exchange unless you understand how it operates.