The major purpose of this article is to investigate the impact of the US dollar exchange rate on the Nigerian economy between 2001 to 2022.

An economy exchange rate reflects the ratio at which one currency can be exchanged with another currency i.e. it is the ratio of currency prices. In other words, an exchange rate specifies how much one currency is worth in terms of the other, an appropriate or correct exchange rate has always been one of the most important factors responsible for economic growth in the economies of many developed countries, whereas a regular fluctuation or inappropriate exchange rate has been one of the major obstacles to the economic growth of many African countries of which Nigeria is included.

In Nigeria today the constant movement of the dollar rate or exchange rate is of great importance to the economy and the general public because one way or the other fluctuation harms the competence of the economy to reach the optimal capacity of productivity. There are times people ask questions like will dollar rate increase next week?

Nigeria uses two basic types of exchange rates namely: the official exchange rate and the market exchange rate

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  • The official exchange rate is usually determined by the Central Bank or monetary authority
  • The market exchange rate is usually determined by the market forces of demand and supply

According to the apex bank, these exchange rates were created because they were necessary for a single economy like Nigeria which is battling a crisis.

The dollar rate can either have a negative impact or a positive impact on the Nigeria economy based on the following:

  • There is a negative impact of the dollar rate on the Nigerian economy when there is a fluctuation in the dollar to naira exchange rate or when there is a reduction in the exchange rate of naira which can lead to instability in the economy.
  • There is a positive impact of the dollar rate on the Nigerian economy when the exchange rate from dollar to naira is constant or when there is an increase in the exchange rate of naira which leads to productivity and stability in the economy.
dollar exchange rate

Sometimes, we ask ourselves, what happens when dollar exchange rate increases? Between 2001 – and 2022 Nigeria experienced a constant fluctuation in the exchange rate which has been one of the major obstacles to Nigeria’s economic growth, has harmed Nigerian competence, reduced productivity in the economy, and has also led to a crisis in the economy.

The table below shows the value of one U.S. dollar exchange rate in the Nigerian naira between 2001-and 2022.

Note: PM = Parallel Market or Black Market Rate

YearNaira (₦) Per USD ($)
200199–106 (104–122 PM)
2002109–113 (122–140 PM)
2003114–127 (135–137 PM)
2004127–130 (137–144 PM)
2005132–136
2006128.50–131.80
2007120–125
2008115.50–120
2009145–171
2010148.21–154.8
2011151.05–165.1
2012155.09–161.5
2013153.21–162.9
2014170–199
2015199–300
2016390–489 (310-N370 PM)
2017333.7146
2018360
2019305
2020361
2021413
2022415.42 (January 22) (Buying Rate: 570, Selling Rate: 575 – PM)

In Conclusion, The Nigerian government should put more effort into maintaining a stable and sustainable exchange rate as the stability of this enhances the economy’s industrial output and in other words, improves economic growth. Doing so will help solve issues relating to the reason for increase in dollar rate today. In addition, there should be an increase in the exchange rate of the Naira to increase economic growth and development and the interest rate should be at a minimum to increase the average Nigerian purchasing power.


Lady Prowess

My name is Okafor Peace Ngozi (Lady Prowess). I'm a writer who is also learning to write meaningful code. My journey in content writing started in 2017 and it's been great all through. When I am less busy, I spend more time on interactions and listening to good music. I also love to follow tech Twitter conversations. On this blog, I will always write beginner-friendly articles, Lifestyles, and tutorials to also share Technical Writing tips that I have gained along the way. Please follow me on this blog

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