If you are a GTBank customer who often engages in international trade, knowing the current exchange rate for the US dollar to the Nigerian naira is crucial. You can choose between the black market exchange rate and the official bank rate that your bank pays you, unless you have a dollar account (also known as a domiciliary account).
Gtbank Exchange Rate Dollar To Naira
Short History of Naira Devaluation
As of 1981, $10 million bought less than N6.1 million. Back then, one dollar could buy 61 kobo. The exchange rate for N4.1 billion (back in 1980) was $10 million (today’s worth). This means that the naira has lost 99.8 percent of its value versus the dollar in the intervening four decades. Perhaps never before has a currency depreciated so rapidly.
The naira has seen a number of devaluations in the preceding years, with the goal of bringing it closer to its true worth. This is an occurrence that is surprisingly typical of commodity currencies around the world.
The CBN raised the official exchange rate in March of last year, from N307 to N360. The next year, the exchange rate was reduced to N380/$.
Before this year, when the currency crisis arose, the CBN’s official rate was the Investors’ and Exporters’ (I & E) Window rate.
To many Nigerians, the controversial Structural Adjustment Policy is the root cause of the naira’s problems in the past (SAP). Indeed, the value of the naira rose from 89 kobo to a dollar in 1985 to N4/$ in its final days under the SAP, a policy that many experts criticized as misguided.
To approve facilities for Nigeria, the World Bank and the International Monetary Fund (IMF) — as is customary for them — imposed a number of conditions, one of which was the adjustment of the currency rate.
Since then, that currency has seen a wild ride marked by periodic significant liquidity problems.
An overvalued naira discourages foreign investment, therefore a devaluation is proposed every time there is a crisis.
This line of thinking has taken deeper root in the discussion about the value of the dollar than at any other moment in the past few years.
The decision to devalue the naira in 2015 to N193/$ was based on projections of large-scale capital imports. This same line of reasoning was used to justify yet another devaluation a year later.
Decisions to devalue the currency last year were made in part to entice the capital inflow needed to strengthen the economy’s liquidity position. Yet the naira is viewed as overvalued, a view shared by Prof. Yemi Osinbajo, the country’s vice president.
Undoubtedly, the demand and supply of a currency, the volume of exports relative to imports, and the performance and competitiveness of the home economy all interact to determine its strength.
A stronger currency does not result in a stronger economy, as former Central Bank governor Kingsley Moghalu has pointed out on numerous occasions. Yet, in the long run, a more robust economy will lead to a more robust currency.
According to this line of thinking, China was formerly blamed for artificially depressing the value of its currency in order to give its exports an economic boost on the world stage.
Therefore, a weaker currency is preferable for an economy that seeks to compete on the global market.
However, at what price will the naira’s fair value emerge if it has lost more than 99 percent of its value against the dollar over the past 40 years and is still regarded overvalued?
While it’s true that a weaker naira could help Nigeria capitalize on rising international demand for its exports, which could lead to the creation of new jobs and an increase in domestic production capacity, it’s also true that the country faces other, more systemic problems that a currency devaluation would do nothing to solve.
Manufacturers can only sell as much as they are able to create due to the many limits in place, even if the dollar is suddenly worth N5,000 tomorrow and other Africans swarm markets to buy the extremely inexpensive made-in-Nigeria products.
This indicates that the farmers’ fear of an endemic insecurity problem may not be alleviated by a significantly devalued naira. There will be no improvement to the subpar sourcing of local inputs. The logistical problems of the past are unlikely to be solved by a suddenly weakened naira.
Sometimes it’s more expensive to get raw materials to Lagos from up north than it is from Asia or Europe. The local industries that rely on these imported commodities will be at a competitive disadvantage if the naira continues to decline in value.
Nigeria, like South Africa and Egypt, seeks to become the economic powerhouse of the area. The country’s economy is the largest on the continent, followed by that of South Africa and Egypt, and this dominance is based solely on the size of their respective GDPs.
However, the naira remains one of the continent’s weakest currencies. In terms of purchasing power, the naira ranks third among the world’s top 10 currencies, behind only the Angolan kwanza and the Tanzanian shilling.
The currency rate for one Egyptian Pound is N26, whereas one for one South African Rand is N28. Shillings of Kenya and Cedis of Ghana. The naira is weaker than the Moroccan dirham, the Algerian dinar, and the Ethiopian birr.
However, this was not always the case; the naira historically enjoyed a reputation for strength and stability, which translates to a steady decline in value relative to other currencies.
While it’s true that a country’s economy benefits from a weak dollar, this doesn’t mean that news of a declining dollar is met with celebration. Even China has come to the conclusion that a weak currency disqualifies it from the title of regional leader.