What Happens To The Black Market?

[Mr.Simon]

I love this analysis and breakdown. It’s a win win situation for the Nigerian economy

Yes it is

 

[Crystal]

You are right

But that is the truth, another overnight political policy can weaken the process

 

[Crystal]

Absolutelyv

Ys, I agree to this you said. If the government can be able to manage it well...

l

 

[Benjamin E Housel]

If IMTOs stop paying in dollars, many people who used to receive dollars and sell at parallel market may no longer have access to physical dollars.

Will this reduce black market demand and help the naira appreciate?

In a strategic sense, removing dollar payouts from IMTOs can reduce parallel market demand and create conditions for naira appreciation, but the magnitude depends heavily on official dollar availability and policy credibility.

 

[Vicole]

If IMTOs stop paying in dollars, many people who used to receive dollars and sell at parallel market may no longer have access to physical dollars.

Will this reduce black market demand and help the naira appreciate?

I believed it will reduce it, but trust my Nigerians if the rate isn't favourable like that of black market, they will still find a way to have access to the physical dollar and exchange through black market

 

[Vicole]

Yes, it likely would—but with some nuances. Here’s the breakdown:
Mechanism:
Currently, many Nigerians abroad send money in dollars through IMTOs. Recipients often sell those dollars on the parallel market to get naira at rates higher than the official rate.
If IMTOs start paying only in naira, those recipients no longer have dollars in hand to sell. This removes a portion of the demand for dollars on the black market.
Effect on black market:
With less physical dollars circulating, the parallel market demand could drop, which may ease pressure on the naira and slow its depreciation.
However, it doesn’t eliminate all dollar demand. Businesses and individuals still need dollars for imports, travel, and other transactions.
Caveats:
Some people might find alternative ways to access dollars (e.g., via friends abroad or less regulated channels).
If the naira remains overvalued officially or if dollar scarcity persists, black market activity might just shift rather than shrink.
Bottom line: Paying remittances in naira can reduce black market dollar demand somewhat, giving the naira temporary relief, but it’s not a guaranteed fix for long-term currency


stability.

I agreed to this you said, it will reduce quite alright but Nigerians will still find a way to boycott it

 

[Vicole]

All things being equal... It is a plus to our economy, unfortunately nothing is guaranteed in my beloved country

Lolz, funny enough even them our government will still find a way to get their physical dollar here in Nigeria

 

[Vicole]

But that is the truth

Yes, she's right, my country won't stop doing wonders when it get to finance

 

[Vicole]

Yes, if IMTOs stop paying in dollars, it could reduce the demand for physical dollars on the black market. This might help ease some pressure on the naira and contribute to its appreciation. However, the effect will depend on how well the government can manage the supply of dollars through official channels, as people may still find ways to access foreign currency through other means.

Yes I agree, it will reduce demand, and a plus for our economy but it won't reduce the black market demand entirely cause we Nigerians will always find a way

 

[Vicole]

Yes, shifting remittances to naira could reduce black market demand for dollars, easing pressure on the naira temporarily. However, people may still find ways to access dollars, and if dollar scarcity continues, the parallel market might adapt. It’s not a long-term solution.

You're right, they will eventually get a way so far as the black market price is more favourable than the bank rate

 

[Vicole]

Smiles, you're right. All this Nigerians might still find a way around it if the rate is low compare to the one of black market

Normally, there's always a way for Nigerians

 

[Vicole]

It's true

Yes

 

[Vicole]

At all. It is not a long term solution

Honestly, it's not. Cause this policy they can't even maintain it for long

 

[Vicole]

Yes, probably for short term benefits or till after election, cause I know my country.

Yes, it's possible

 

[Vicole]

It depends on how the government will manage it too

Our government manage things well ?
Will see when that day will be to see our government managing this well

 

[Vicole]

Absolutely. It will reduce black market demand which consequently will impact the naira positively.

Yes, I agree naria will strong but it won't guarantee a continuous strong naria cause they will still not to manage the policy well

 

[Vicole]

I love this analysis and breakdown. It’s a win win situation for the Nigerian economy

Yes, it is a win win but not for a long term benefit

 

[Vicole]

You are right

Yes. He's

 

[Vicole]

Yes. It’s hardly a long-term solution.

Yes, it might not last long

 

[Vicole]

But that is the truth, another overnight political policy can weaken the process

Normally, let election come and end, we will see another chapter