Do you know the Dollar to Naira equivalence now?
The Gtbank Dollar to Naira exchange rate was ₦510.75 to a dollar, on Wednesday the 29th of August, 2021; currently the 1$ to Naira officially sells at ₦505, a drop of about 0.31% compared to the ₦490 at which it was sold on Thursday.
This was due to the calculated policies implemented by the Central Bank of Nigeria in view of reaching a convergence in the Bureau de change (BDC), as well as the bank-bank markets.
Now, we are proud of about $31 billion in Foreign Reserves, and with CBN management handling policies, we are sure of relentless efforts in improving the rates of Naira to Dollar in the nearest future.
For some months now, the Dollar has generously woe it Naira counterpart, with exchange rates skyrocketing as high as N507 officially and N520 to a dollar in the parallel market about a week ago.
Consequences of the Dollar to Naira Rate to the Economy
Quite a number of things can affect the dollar to naira bank exchange rate aside from economic policies. We have the rate of import and export activities, oil price as put by OPEC, as well as roles of the government. Also, when we rate foreign goods over our local goods, we hit hard on our unstable economy.
The reason is that the money (Naira) pumped into these foreign transactions, translates into devaluation of the Naira eventually. The more common it is, the valueless it becomes. Also, the sudden increased supply of Oil in the international market has not produced the best effects on the nation.
All these and more led to the predicted fall that befell the Naira of late. Therefore, the more we encourage local manufacturing schemes, the more we improve bank exchange rate for dollar or any currency against the Naira.
On Import and Export Market
Then what effect does the CBN have on the exchange rate of dollar to naira on imports and exports? One might want to ask. Like we all know, Forex cuts across virtually any international affair that pertains to finance, from traveling abroad on vacation, to scholarships overseas, to trade on physical products.
No doubt business is not much fun when you have to pay more than you sold an item in order to replace it; that’s a loss—a word that sounds most eerie to any entrepreneur. Consider the scenario whereby the exchange rate when you sold the lasts of a product from your warehouse was ₦450, and on making orders from your suppliers, you find that, that product now costs more Naira to purchase because the exchange rate had risen to ₦510.
This does not encourage any business as it implies that you would need more cash to buy fewer items; and consequently the result is an inflation leading to increased cost of living, due to what the Naira is experiencing in the past few days.
It is rational to suppose that since the official bank rate dollar to naira had not been friendly for a while before now, this positive development of positively valued Naira would lead to an upsurge in importation; it is entrepreneurial wisdom to purchase when you would get the maximum goods for little cash, so many entrepreneurs would see this current dollar to Naira exchange rate of banks as their chance to gain from the dance of the currencies, although they might be optimistic of further improvements.
On the other hand, continuous expectations would most likely be placed on the effects of this recent exchange rate for dollar to naira on exportations; it is interesting to note that today a barrel of oil sells at $49.97 which indicates a positive drift. It would however make for effective balance of payment, if the exchange rates remain favorable.
We must therefore keep our faith hanging and our hopes up at this point as regards how much is Dollar to Naira bank rate; hoping for the cool sea breeze to blow cold our economic heat based on policies and modalities put in place. You would consider this a mountain-moving faith, if you look into the great depression of the 20s that the now great America faced, or the deep recession of the 70s that China overcame triumphantly.