What factors influence the fluctuation of Naira exchange rate in the black market?

3 answers

• Dec 29, 2021 · 3 years ago
  The fluctuation of the Naira exchange rate in the black market is influenced by several factors. One of the main factors is the supply and demand dynamics of the Naira. When there is high demand for foreign currency and limited supply of Naira, the exchange rate tends to increase. Additionally, economic factors such as inflation, interest rates, and government policies can also impact the exchange rate. Political instability and uncertainty can further contribute to the volatility of the Naira exchange rate in the black market. Overall, the fluctuation of the Naira exchange rate in the black market is a result of a complex interplay of various economic and political factors.
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• Dec 29, 2021 · 3 years ago
  The fluctuation of the Naira exchange rate in the black market can be attributed to multiple factors. Market speculation and investor sentiment play a significant role in determining the exchange rate. Any news or events that affect the perception of the Naira's value can lead to fluctuations. Additionally, external factors such as global economic trends, oil prices, and international trade can also impact the Naira exchange rate. It is important to note that the black market operates outside the official channels, which can further amplify the volatility of the exchange rate. Therefore, it is crucial for individuals and businesses to closely monitor these factors to make informed decisions regarding currency exchange in the black market.
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• Dec 29, 2021 · 3 years ago
  The fluctuation of the Naira exchange rate in the black market is influenced by various factors. One of the key factors is the foreign exchange reserves held by the central bank. When the reserves are low, it can lead to a depreciation of the Naira in the black market. Another factor is the level of economic stability and confidence in the country. Political instability, corruption, and economic mismanagement can negatively impact the Naira exchange rate. Additionally, the demand for imports and exports, as well as the balance of trade, can also affect the exchange rate. It is important for individuals and businesses to stay informed about these factors to navigate the fluctuations in the black market effectively.
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