Dollar scarcity in Nigeria has caused hyperinflation, and it has had adverse effects on business and the economy.

The demand for dollar is very high because, even well-established companies/institutions have to recourse to black market (glazed as parallel market).

CBN thought they could discourage uses of the dollar by making it scarce. They’ve forgotten that we’re an import-dependent nation. As far as industrialization is concerned, we’re extremely backward.

USD dollar reached as high as N520/$ in the last few months.

CBN’ experiment failed.

In order to salvage the situation, CBN started injecting large quantities of dollar into the market, doing so frequently.

As a result, dollar slid as low as N370/$, and then rose to N405/$. Currently, price is around N385/$.

People should note that the black market price can’t fall below the Western Union rate, not to mention the CBN rate. There’s no way black market is going to be cheaper than the official market.

Should Western Union rate get revised lower, and dollar scarcity thins out further, the current rate may drop lower and lower. Should the official rate get revised lower (Naira revaluation), the black market rate would fall lower.

In the absence of this, the black market price could go up and up.

But we shouldn’t expect black market rates to go below Western Union/Money Gram rates, plus CBN rates.


Perfect Money/Payeer/Epay/Neteller: www..com.ng

Thanks for your insightful forecast.