Black Market Traders Crash Dollar, Sell at New Exchange Rate As Naira Gains

Black Market Traders Crash Dollar, Sell at New Exchange Rate As Naira Gains

  • Bureau de Change (BDC) traders in Lagos have set a new exchange rate for the dollar for Nigerians looking to buy
  • The latest exchange rate reflects a significant drop compared to the rate quoted in the previous week
  • The CBN is holding a 2-day monetary policy meeting, and there are concerns that the decisions made could affect the Nigerian currency

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Bureau de Change (BDC) traders have started selling the US dollar below N1,500 at the parallel foreign exchange market, also known as the black market.

This development comes as the Central Bank of Nigeria's Monetary Policy Committee (MPC) meets today, Monday, May 20, and Tuesday, May 21, to devise ways to help the naira in the foreign exchange market and tame inflation.

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Hope for Nigerians as new naira to dollar exchange rate emerges
Naira gains in the unofficial market Photo credit: Bloomberg/contributor
Source: Getty Images

BDC traders who spoke to Legit.ng said that the dollar now sells in the black market at N1,460 on Monday, May 20, 2024.

The latest rate represents N60 improvement for the naira compared to Friday's closing exchange rate of N1,520/$1.

Abudullahi, a BDC trader, told Legit.ng:

"We are still patiently waiting for the CBN to release dollars to the market. For now, we sell based on what we can get from the public.
"We buy at N1,440 and sell at N1460 to Nigerians."

CBN moves to help the naira

In recent weeks, the CBN, in collaboration with security agencies, has implemented various measures to curb the naira's depreciation, including tightening regulations on foreign exchange transactions and cracking down on illegal currency dealers.

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However, Nigeria's economic challenges, such as high inflation, strong importation demand and weak oil production, remain potential threats to the naira's stability.

The CBN's monetary policy meeting outcome will further provide direction for the naira in the weeks ahead.

CBN sells dollars cheaply to BDC operators

Earlier, Legit.ng reported that the CBN conducted another round of dollar sales to licensed Bureau De Change Operators.

The latest sale is part of the apex bank's plan to ensure enough liquidity in the market and halt the naira's fall.

The CBN has also fixed an exchange rate limit for the BDCs when selling to Nigerians seeking dollars.

Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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