Nigerian Naira (NGN)

What Is the Nigerian Naira (NGN)?

NGN is the currency code for the Nigerian naira, the official currency for the Federal Republic of Nigeria. The Nigerian naira is comprised of 100 kobos. As of December 2020, 1 U.S. dollar is equivalent to around 380 NGN.

Grasping the Nigerian Naira

The Nigerian naira supplanted the country's utilization of the British pound in 1973. Pound to naira conversion was set at a rate of two naira for each pound. By 2008, inflation had emphatically devalued the currency. The government made arrangements to once redenominate the currency at a 100 old nairas to 1 new naira yet suspended those plans.

The [U.S. dollar](/usd-US dollar) is the most famous foreign exchange currency pair including the NGN. The currency has been pegged to the U.S. dollar at different levels throughout the long term. As of December 2020, the USD/NGN exchange rate drifts almost 380. That means it takes 380 NGN to buy one USD.

The Central Bank of Nigeria oversees and disseminates the Nigerian naira. One of the bank's primary jobs to control the inventory of NGN in circulation, as well as to guarantee the country's financial security and endeavor to keep prices stable.

Nigerian Naira Banknotes and Coins

Naira coins and notes are minted by the Nigerian Security Printing and Minting Company, with some currency additionally delivered by overseas printing companies.

Coins incorporate the 50 kobos, 1 naira, and 2 nairas pieces flowed beginning around 2007. Banknotes incorporate the 5, 10, 20, 50, 100, 200, 500, 1000 nairas notes; 50 kobo and 1 naira notes are as of now not being used. In 2014, the central bank delivered a dedicatory note praising the country's independence. This memorial note has a [quick-reaction code](/fast reaction qr-code) (QRC) that when examined takes the client to a website about Nigeria's history.

The Nigerian Economy

Nigeria is situated on the West Africa coast and gets its name from the Niger river. The region was home to numerous old and prosperous social orders before falling under British provincial rule during the 1800s. In 1960, the region turned into the independent Federation of Nigeria. Soon after, the country spiraled into a civil war which went on until the 1970s. France, Egypt, Britain, and the Soviets intruded in the country during the long periods of war. Until 1999, the leadership of Nigeria switched back and forth between chose officials and military tyrannies.

Military rule, political corruption, and fumble harmed the economy and ran up monstrous foreign debt. Nigeria defaulted on its debt as oil prices fell during the 1980s. Renegotiation of its Paris Club debt happened in 2005, and in 2006 Nigeria cleared its debt.

Broad and uncontrolled inflation has been a critical problem for the Nigerian economy. The inflation rate in Nigeria soared over 70% in 1995. From that point forward, inflation has found the middle value of around 12 percent. Improvements in controlling inflation have been credited, in part, to less increments to the cost of critical staples like utilities and food. Somewhere in the range of 2016 and 2019, interest rates have moved somewhere in the range of 11% and 14%.

As indicated by World Bank data, Nigeria is a lower-center pay emerging market which is as yet battling with the impact of inflation. The country experienced 11.4% annual inflation and gross domestic product (GDP) growth of 2.2% in 2019.

Illustration of NGN On Forex Markets

Expect the exchange rate for the USD/NGN is 361. This means it costs 361 naira to buy one U.S. dollar. Currency dealers and banks won't offer this rate while seeking exchange one currency for the other in cash (carefully or physically), since they will incorporate their exchange fee into the rate. Hence, somebody changing over NGN cash to USD cash might pay 379 NGN for one USD, around 5% more.

This 5% markup, is the bank or dealer's profit on the transaction. Fees to exchange physical currencies normally range from 0.5% on bigger amounts of currency to up to 5% or more, contingent upon the currency being exchanged and the amount of currency.

On the flip side, somebody who needs to change over U.S. dollars into NGN will not get 361 of them by the same token. They might get 5% less (in light of what the bank or dealer charges), and that means that for each U.S. dollar they will receive approximately 343 NGN.

Assuming the exchange rate goes from 361 up to 400, that means the naira has diminished in value, since it costs more naira to buy one USD. Assuming that the rate were to be brought down to 320, that would mean the naira has increased in value against the USD, in light of the fact that it currently costs less naira to buy a USD.

The naira will in general vary more against different currencies since the Central Bank of Nigeria screens the USD the most and endeavors to the peg the currency to it. The NGN isn't pegged to different currencies, so the rate could shift daily. Expect the AUD/NGN rate is 245.30. That means it costs 245.30 NGN to buy one Australian dollar.

To see what the exchange rate is in terms of NGN/AUD, partition one by the AUD/NGN rate, or 1 \u00f7 245.30 = 0.004. That means it costs not exactly half a penny AUD to buy one NGN.

Features

• The Nigerian naira (NGN) is the official currency of the Federal Republic of Nigeria.
• The Central Bank of Nigeria oversees and conveys the Nigerian naira and endeavors to keep up with price stability with it.
• The naira has been ceaselessly devalued since its commencement in 1973, and inflation stays above 10% starting around 2019.