What is the Nigerian Black Market

You have been hearing of Fx, exchange rates, forex, foreign exchange markets etc day by day, but you might not have a very clear understanding what these terms mean. This article throws more light on the black market and other confusing terms.
You should first of all understand what exchange rate is. Exchange rate is simply defined as a rate for exchanging one currency to another, e.g dollar to naira, pound to naira, pounds to naira, naira to dollar, 1 usd to ngn, Etc. Just as different services and products have their own prices, the price of a currency is also known as the exchange rate. What this entails is that the currency of a certain country (let’s say Nigerian currency) has its own value when compared with the currency of another country. Anytime you want to travel to another country, you ought to be aware of the exchange rate value of the currency of that country since you will be buying that country’s currency. For example, if as a citizen of Austria, you travel from Austria to USA and the exchange rate is 2.30 dollar against Euro, it means that you can purchase much dollar with your Euros. If you are in search of dollar to naira exchange rate, naira to pound, dollar rate in Ghana and trying to make conversions of 1 gbp to ngn or 1 ngn to usd, Reuters currency calculator will help you a lot in making currency conversion.
Are you worried about the price with which you can buy in another country for your currency? If yes, then you should have it at the back of your mind that the price of a product theoretically stays the same, not minding the currency used to determine its value. This is so because the exchange rate keeps at its own level the value of the currency. Another question people usually ask is, ‘where can I find currency exchange near me?’ There are many ways to do so, and an efficient way is to ask of the black marketers.
You might wonder about how exchange rate is being calculated. If so, then know that there are two methods used for it, one is the fixed rate, and the other method is the floating method. In the fixed rate, a country’s central bank is responsible for setting and maintaining it and it is said to be the official exchange rate for that currency. To determine the price level of the currency, there is a comparison between the country’s currency to major currencies like the USD or the Euros. What the central bank does is to buy and sell its own currency so as to make the exchange rate set at a previous level.
The second method, which is the floating method is determined using the balance of supply and demand of the local currency on the private market. Sometimes the floating exchange rate is called the self-correcting, since the difference between the currency supply and demand is automatically corrected by the market. The demand and supply levels influence how this type of exchange rate is being modified constantly.
It might appear like the floating exchange rate and the real value of the currency are closer since demand and supply for that currency is being determined by the price, however, it isn’t totally correct because such exchange rate is highly sensible to speculations. The black market may influence the exchange rate of a currency strongly, and for this reason should a fixed regime be applied because it allows the market to keep pressure on the exchange rate.
To conclude, there isn’t any exchange rate that is determined totally on a floating or fixed method. Combining these two methods is mostly used to set the price of the currency of a nation for the accurate currency value.
The Nigeria black market, shadow economy is a market characterized by some style of noncompliant behaviour with associate degree institutional set of rules. Cash usage is the most popular medium of exchange in transactions since money usage doesn’t leave a written account.
The black market is distinct from the grey market, in that commodities are distributed through channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer, and the white market.
There are various locations in Nigeria where you could exchange pounds to naira and dollars to naira and vice versa. Some of the locations are Eko Hotel, International Airports, Yaba, Abuja Zone 4 and Portharcourt Presidential hotel just to mention a few. Naija black market helps the local economy