A considerable amount of money flows between the United States and Nigeria regularly. In 2016, more than U.S. $5.66 billion was sent from the United States to Nigeria as remittances. In the same year, trade of goods and services between both nations stood at around U.S. $9 billion. While exports from the U.S. accounted for around U.S. $4.4 billion, imports from Nigeria made up for around U.S. $4.6 billion.
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The United States has used the dollar in its existing form as legal tender since 1792. The U.S. dollar is the most preferred reserve currency globally, and it is also the world’s most commonly traded currency. In April 2016, the global forex market turnover share of the U.S. dollar was more than 87%. Estimates suggest that over U.S. $5 trillion is traded in the forex market every day.
Use of the U.S. dollar as the sole currency is prevalent in Ecuador, El Salvador, the Caribbean, two British Overseas Territories, the Federated States of Micronesia, Turks and Caicos Islands, as well as the British Virgin Islands. It use alongside other currencies can be found in places such as Belize, Panama, Liberia, Zimbabwe, Cambodia, and Myanmar. Some currencies still pegged to the U.S. dollar include the Bahamian dollar, the Djibouti franc, the Hong Kong dollar, and the United Arab Emirates dirham.
|Nicknames||Buck, moolah, paper, dough, dead presidents, |
bones, greenback, green
|Bank notes||$1, $2, $5, $10, $20, $50, $100|
|Coins||1c, 5c, 10c, 25c, 50c, $1|
The Nigerian Naira has served as the official currency of Nigeria since 1973. Nigeria used various forms of currencies ranging from cowries to manilas before the establishment of West African Currency Board. It was responsible for issuing currency in the region from 1912 to 1959.
The Central Bank of Nigeria introduced new currency notes and coins in July 1959, withdrawing notes and coins issued by the West African Currency Board at the same time. However, a change in the legal tender status took place in July 1962.
In 1971, Nigeria’s Head of State announced that the country would switch to a decimal system from January 1973. The new currency was to be called naira, and one naira would be equal in value to 10 shillings.
Inflation reduced the value of the Naira significantly by 2008. While the country’s government planned to redenominate the currency at the rate of one new naira = 100 old naira, the move was abandoned by the president.
|Bank notes||NGN 5, NGN 10, NGN 20, NGN 100, |
NGN 500, NGN 1,000
|Coins||50 kobo, NGN 1, NGN 2|
U.S. Dollar / Nigerian Naira Historical Rates
Nigeria has relied on different exchange rate systems since the introduction of the naira. It adopted the dual exchange rate system from 1986 to 1987. It briefly adopted the Dutch auction system (DAS) in 1987, before moving on to the unified exchange rate system until 1992. From 1992 to 1998 it relied on the fixed exchange rate system. It moved back to DAS from 1999 to 2002, and then to the retail Dutch auction system until 2006. In 2006, it moved to the wholesale Dutch auction system.
After being pegged to the U.S. dollar at the rate of ₦197 to the dollar for many months, the naira was allowed to float in June 2016. By July 2017, it traded at ₦318.25 to the U.S. dollar. It then experienced some stability, before falling in July 2018, getting to ₦359 against the U.S. dollar.
USD/NGN in the last five years
|U.S. $1 =|
|1 July, 2013||NGN 160.600|
|1 July, 2014||NGN 161.850|
|1 July, 2015||NGN 199.200|
|1 July, 2016||NGN 318.250|
|1 July, 2017||NGN 305.900|
USD/NGN in the last five months
|U.S. $1 =|
|1 March, 2018||NGN 305.400|
|1 April, 2018||NGN 305.450|
|1 May, 2018||NGN 305.950|
|1 June, 2018||NGN 305.500|
|1 July, 2018||NGN 359.680|
What Affects USD/NGN Rates?
Since the liberalization of the foreign exchange market in the mid 1980s and Nigeria adopting the flexible exchange rate system in 1986, the naira has experienced volatility against most major currencies. It is believed that this led to significant fluctuations in external reserve, distortion of production patterns, as well as a currency crisis.
The central bank of Nigeria uses its monetary policy to achieve the country’s targets of macroeconomic management. As a result, the bank tweaks its monetary policy to influence or control factors such as exchange rate, interest rates, inflow of capital, and bank credit.
Some of the other factors that have a bearing on the USD-NGN currency pair include monetary policies set by the U.S. Federal Reserve, the sociopolitical climate of these countries, as well as their interest rates and trade deficits.
Sending money from the U.S. to Nigeria or from Nigeria to the U.S. requires that you pay close attention to the prevailing exchange rate. While you might want to use the services of a bank, consider comparing some of the top overseas money transfer companies first because they might lead to noticeable savings.