What Happens To The Black Market?

[Vicole]

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

I doubt sha

 

[Vicole]

Yes it will but Nigerian will still find they way out to patronise them

You're right, sir

 

[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.

 

[Benjamin E Housel]

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.

Rightly said

 

[Benjamin E Housel]

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

Smiles..

 

[Vicole]

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.

Exactly, if IMTOs stop paying in dollars, fewer people will be buying dollars on the black market, which could ease pressure on the naira. But how much it actually helps depends on how much dollars the official market can provide and whether people trust the government to stick to its policies.

 

[Chinyere]

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.

Yep, it depends on both policy credibility and availability of dollars

 

[Chinyere]

Exactly, if IMTOs stop paying in dollars, fewer people will be buying dollars on the black market, which could ease pressure on the naira. But how much it actually helps depends on how much dollars the official market can provide and whether people trust the government to stick to its policies.

Exactly