Dollar to Naira Exchange Rates International trade has grown tremendously in the current century. Trade outside boundaries of a country has consequently grown. For such business to be successful, it is important for business men and women to invest in different currencies from time to time. Case in point is how business men plying their trade between United States of America and Nigeria always need to use the Nigerian Naira and the American dollar. It is this reason that makes business men and women very particular about foreign exchange. Rates of exchange form a very important aspect of consideration not only by governments but as well as business men and women. This is vital since a small change in rates of foreign exchange could consequently lead to huge financial changes in the market. Being able to observe and forecast foreign exchange markets is therefore important to business men. Exchange rates are in most instances linked to the United States dollar as opposed to directly comparing them to other currencies. This is because the Dollar is arguably the most commonly used currency in international trade. Let us focus on the conversion rates of the Nigerian Naira and the American dollar. First of all the current exchange rate for the Nigerian Naira in comparison to the United States dollar is three hundred and fifteen Naira to the dollar. This exchange rate is not steady since it keeps changing with time due to different reasons. This leads us to analyze different factors that contribute to the fluctuation of exchange rates from time to time. It is important to note that different currencies convert at different rates to the dollar at different times because of several reasons.
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Inflation is one of the factors that influence daily exchange rates of different currencies. Inflation affects exchange rate by affecting the prices of commodities in the commodity markets. An example is how the Naira compares to the dollar when prices of commodities within Nigeria change abruptly and sharply. This is why countries must put up measures that protect their currencies from fluctuation as occasioned by inflation.
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Changes in interest rates within a country could also determine foreign exchange rates involving the currency of the country in question. For instance, if banks within Nigeria alter their interest rates considerably, this would definitely have an effect on how the Naira would exchange to the dollar. To achieve stable exchange rates of the Naira in Nigeria, the government has cushioned citizens against huge interest rates. Government debts and balance of payments are also important factors that dictate how the Naira compares to the dollar. Other non economic factors that dictate this rate include political stability of the country as well as market speculation.