Factors That Affect Naira Exchange Rate To us Dollar

 The US dollar to the naira exchange rate is 485 JPY in the Lagos Nigerian parallel market. The dollar traded at 482 Yen when the black market opened this week. This corresponds to the dollar's rise by 0.62% this week.

When we look at the entire month, the dollar exchange to naira today was recorded at 482 yen when the black market opened on Monday, March 1, 2021, earlier this month. With the US dollar trading at 485 yen now, we see a 0.62% increase in the US dollar to naira exchange rates for March.

Supply and demand

Oftentimes, exchange rates are dependent on the supply and demand of the country's currency. When investors or governments try to sell a country's currency, the supply of that currency increases. This reduces the value. If the demand for a particular currency increases, the value also increases. Some countries control supply and demand by actively buying and selling currencies.

Inflation

When a country's inflation rate is high, the value of its money decreases. The same amount of money won't go that far next year. Nigeria tends to have a high rate of inflation, which may cause the value of the Naira to depreciate. However, this may work in your favor if you send another currency to Nigeria.

Inflation rates affect the value of a country's currency. A lower rate of inflation generally shows an increase in the value of a currency while increasing its purchasing power compared to other currencies. Conversely, those suffering from high inflation often see a depreciation of their currencies compared to those of their trading partners, often accompanied by higher interest rates.

Government debt rises

A government that has a large amount of debt does not spend a lot of money investing in other countries. These other countries could start withdrawing their money from the heavily indebted country, thus increasing the supply of the country's currency. dollar exchange to naira today reduces the currency's value. Nigeria's economic situation was not competing with the US dollar, but with the British pound sterling in the United Kingdom and buying it in N2 at £ 1. Nigeria is a blessed country that also suffers from countless hydra-head problems.

Speculation

Investor speculation can affect exchange rates. If an investor believes that the Nigerian currency is undervalued, he may start buying the Naira in the hope that he will soon be able to sell it at a higher exchange rate. When many investors start doing the same thing, the value rises, but there will come a time when these investors start trying to sell, and the tide will turn. This type of speculation causes exchange rates to rise and fall.

Method of transferring money

However, as a living abroad, you are extremely concerned about the exchange rates you get when transferring money. In this case, the money transfer method can have a significant effect on the exchange rate. Each money transfer service uses an exchange rate slightly higher than the average market rate you see when determining Google's rates. This price difference is pure profit for the company. This means it is a good idea for consumers to shop around. 

Tourism

Let's use the United States as an example here. If someone travels outside of the United States to another country, they will receive more than one money transfer to that country when the US dollar rises against the foreign currency. Likewise, the depreciation of the currency means that foreigners will be more inclined to visit this country and spend more while they are there.

2021 appears to be another interesting year for Naira, with its value appreciating against the dollar exchange to naira today, a potential effect that many people will be watching.