Black Market Operators Buy Dollar At N738, Pound N920, As Official Market Rate Drops

The Dollar was offered to traders in the official market at the rate of N462.33/$1 by the close of business on Friday, 12 May.

This is lower than the N462.73/$1 investors and exporters bought the United States Dollar last week Thursday, 11 May. 

The exchange rate between the Naira and the Dollar depreciated by N0.4 kobo or 0.08 per cent, indicating the Nigerian currency appreciated in value against the American greenback.

Meanwhile, on Monday, traders in the black market bought the USD at N750/$1 but the Bureau De Change operators bought the currency from the public at the rate between N730/$1 to N738/$1. 

Also, the Bureau De Change operator sold the Pound sterling to the public at the rate of N920/£1 to N940/£1, however, the black marker operator bought the Pound sterling from the public between N900/£1 to N920/£1. 

Prime Business Africa notes that the exchange rate in the black market for people willing to sell to the Bureau De Change is encouraging hoarding of the foreign exchange from the official market. 

Although the Central Bank of Nigeria (CBN) has been launching policies to attract traders with foreign exchange back to the official market and one such policy is the RT200 foreign exchange rebate programme, which offers incentives to repatriate the forex.

Since the CBN introduced the RT200 forex rebate programme, repatriation has increased to $5.6 billion at the end of 2022, against the $3 billion recorded in 2021. 

While the policy has increased repatriation into the official market, it struggles to end hoarding among traders, as the rate in the black markets is more appealing. 

The World Bank had previously warned that: “with the rising parallel-to-official rate premium, incentives are created for agents to settle transactions outside of the I&E window at the parallel rate even after benefiting from the RT-200 rebate.”