The exchange rate for converting naira to dollar using FinTech apps nosedived to N522/$1 according to data collated from the apps.
A quick Nairametrics check on Trove reveals they are charging their customers N522 for a dollar when you deposit naira and wish to convert to dollar. Depositors who use the app to purchase shares from the NY Stock Exchange rely on this exchange rate to make conversions. Bamboo, another popular FinTech app converts for N518.5/$1.
The exchange rates are significantly higher than the $515/$1 currently trading at the black market where forex is sold on the streets and over N100 higher than the official rates of N410/$1 at the I&E window. Nigerians seeking personal travel allowances for dollar travels buy it at the official rates.
The Central Bank on Tuesday the 17th of August obtained a court order to freeze bank accounts of FinTech firms that help Nigerians facilitate the purchase of US securities. The motive for obtaining the court order is a presumed “dollarization” of the exchange rate and a contravention of a 2015 CBN circular that includes the purchase of securities using dollars from the interbank market in 41 banned items listed by the apex bank.
The FinTech companies rely on the banking system to receive naira deposits from Nigerians who want to invest in foreign and even local securities and then converts the same to dollars to enable them pay for the securities abroad. There has been an increase in the number of Nigerians looking to buy foreign assets, a response to the incessant depreciation of the naira and the erosion of the purchasing value of their earnings.
The Central Bank is fighting back, claiming most of the demands for forex are speculative and illegal, culminating in the frequent depreciation of the exchange rate in the black market.
