Nigerian banks exchange rate today is vital information because it can help one make some good savings on the foreign exchange market. This is because not having the right information can cause a person to visit the black market, where he will then exchange his foreign currency at unfavorable rates.
The bank exchange rates, also known as the official rates, are set by the government through the Central Bank of Nigeria. These are the rates that are quoted on all international sources; these rates are the figures used in calculating the money to be paid on any international transactions.
However, because most individuals cannot do business directly with the central bank of Nigeria; but must transact with the banks; it is important to know what the rates look like.
Nigerian Banks Exchange Rate Today
||15- August 2022
Analysis Of The Figures Above
As seen from the table above, the Nigerian bank rates have ranged between N414 and N503 for the US Dollar in recent times. Furthermore, it can also be seen that the naira has been under intense pressure as traders have largely sold their stock of the currency in exchange for dollars.
Presently, the official exchange rate of the naira to USD is ₦432. However, banks need to make some profit from dealing in these currencies; they need to pay the cashiers, and they also need to see some fiscal contributions to the balance sheet coming from the currency dealing desk.
Therefore, banks are allowed to sell at slightly higher rates than the official amounts quoted by the central bank of Nigeria; that is where they make their profit.
However, in order to be competitive, banks have to ensure that their rates are not too far above what is obtainable on the market; otherwise customers would just go to other banks to get the foreign currencies they need.
Can You Buy Dollars From The Banks?
Presently, the Nigerian government policy is to deny access to foreign currencies to non strategic sectors. The reason for this is that the government needs to effectively manage the flow of foreign exchange in and out of the country in order to manage the value of the naira; otherwise traders would exploit the volatility of the market for their profit, making the economy to suffer.
Therefore, one cannot just walk into any branch of a bank and then request to buy US dollars. The request would most likely be denied.
In order to get dollars from a Nigerian bank, one would need to fill several forms, and also get approval. This is because the banks need to be sure that you need the foreign currency for a reason that has been approved by the government.
Selling of foreign currency to Nigerian banks, on the other hand is relatively easy; it requires minimal documentation to sell dollars; although many people insist that the official rates are too low for this purpose. Therefore they turn to the black market.
The Black Market
The Black Market, also called the Parallel Market, is the informal foreign currency exchange that exists in Nigeria. This market is made up of independent currency dealers located in several places across the major cities of the country.
This market is outside the control of the government, and depends solely on demand and supply. Especially for those who have USD and wish to exchange it to naira; the feeling is that the black market is the best place to change the money because there is a higher chance of making more profit from there.
Black market exchange rates are mostly higher than the official rates; but because there are no restrictions on buying and selling, many people choose to patronize this source.
Furthermore, black markets rates vary from place to place; and are negotiable. This feeling of being in control of how much they receive for their dollars make many Nigerians prefer to use the black market.
Reasons Why It Is Better To Use The Banks When Exchanging Dollars
Despite the Nigerian banks dollar exchange rate being low, it is certainly better to use the banks rather than the black market because:
The banks are safer; banks have very good security structures on ground, therefore, one can safely do any amount of dollar transactions, no matter the volume, without any fear.
Banks provide liquidity directly to the economy. Banks circulate the foreign currencies immediately they are received, thus ensuring that demand is met with supply, and that the prices do not go up indefinitely.
It is patriotic to exchange your dollars at the banks; this is most beneficial to the economy because it helps to control inflation, and keep the naira from falling.
Why You Should Avoid The Black Market
The black market usually tempts people with attractive exchange rates; but it is better to avoid it, but rather concentrate on the banks for the following reasons:
The black market is quite unsafe because it is not controlled by any central organization or agency; meaning that people of all kinds of character can pose as currency dealers, and thus steal from people who genuinely want to exchange dollars.
Besides, there are no security measures on ground to protect the customers; most of the currency dealers operate on street corners, markets, and other open spaces.
Furthermore, patronizing the black market is unpatriotic because it deprives the banks of liquidity, contributes to unemployment, inflation, and makes the naira virtually unmanageable.
Nigerian banks exchange rate today is tied to the official exchange rate as declared by the Central Bank of Nigeria. However, the small differences are there because the banks are allowed to make small profits, while doing everything possible to stay competitive by keeping their rates as close to their rivals as possible.