Understanding the Naira-to-Dollar (NGN to USD) exchange rate is crucial for navigating Nigeria’s economic landscape especially amid the current FX manipulations in the country. However, knowing how to save or convert naira to dollar is also crucial to maintain stable rate and take a step ahead the naira free fall against the United States Dollars.
Naira to Dollar Rate: This rate indicates how much Naira is needed to purchase one US Dollar and is influenced by various factors in Nigeria, including CBN’s directive, fuel subsiding, supply and demand dynamics, massive cryptocurrency exchanges, government policies, and global market trends.
A strong Naira relative to the Dollar benefits importers by making foreign goods cheaper, but it can harm export competitiveness. Conversely, a weaker Naira boosts export opportunities but may lead to higher import costs and inflation in home trade.
Individuals and businesses are affected by the exchange rate fluctuations. A favorable exchange rate can increase purchasing power for imported goods, travel, and foreign investments. However, it can also decrease the value of remittances from abroad.
Nigeria apex bank often intervene to stabilize the exchange rate through measures such as currency reserves management, strict crypto firm regulations, naira redesigned and monetary policies. Monitoring and analyzing the Naira-to-Dollar exchange rate is crucial for making informed financial decisions, managing currency risks, and ensuring economic stability in Nigeria.
In essence, naira (NGN) is always in a fall against the United States Dollar (USD). This has triggered me to compiled this article to guide you through ways and methods to convert your nairas to dollars to safe from inflation and devaluation.
How to save Naira in Dollars in Nigeria
Currently in Nigeria, you can save in dollars in three ways; using a domiciliary account, using a cryptocurrency platform by converting naira to USD stable coin and using a Fintech apps like Chipper Cash, Piggyvest and Bundle Africa.
Domiciliary Account
This is the safest but hardest way to save in USD in Nigeria. You will need two references to open a domiciliary account in any commercial banks in Nigeria. This is mandatory by the CBN to ensure you’re not using the account for fraudulent activities.
DOM Accounts are only offered by traditional banks in Nigeria and are domiciled in three (3) major currencies; USD, EUR and GBP. With a DOM Account, you can receive, transfer and save foreign currency. One DOM Account per currency. If you need to have a domiciliary account for British Pound, European Euro and United States Dollars, you will have to create three different Dom Account with each currencies domiciled.
With a domiciliary account, you can securely store your naira funds in US dollars in Nigeria. Simply determine the desired amount, convert it into dollars by purchasing the equivalent, and then deposit it into your Domiciliary account. This can be done in bank or Bureau De Change (BDC) office; they’ll transfer the dollar through their Dom Account to your DOM Account.
However, opening a domiciliary account follows the same procedure as opening a current account, including the potential requirement of two guarantors with active current accounts in same bank. Lastly, a domiciliary account helps safeguard and ensures that your savings in naira remain unaffected by inflation.
Naira to USDT
Converting your Naira (NGN) to stablecoin pegged to United States Dollar (USDT/USDC) is another way to save in Dollar in Nigeria. USDT, a stable cryptocurrency asset developed by Tether, mirrors the value and stability of the US dollar in the digital form.
Each USDT token is pegged to $1 and is fully backed by physical reserves, ensuring its stability amidst market fluctuations. This stability makes USDT an attractive and secure digital alternative to the dollar, offering a haven from volatility.
To invest in this digital dollar, simply register with a reputable cryptocurrency exchange platform, such as CoinCola, where you can purchase USDT with your desired amount of Naira via secured and monitored peer-to-peer (P2P) trade.
Once purchased, you can hold onto USDT for as long as you wish, providing a viable option to safeguard your dollars against fluctuations in the Naira exchange rate. I strongly recommend CoinCola as the best crypto wallet right now because Binance is currently going through regulatory scrutiny in Nigeria.
FinTech Apps
Using finance technology apps that offers IMT services can also help in saving in dollars in Nigeria. Many fintech apps nowadays enable you to save money in multiple currencies of your preference, with some even offering interest on these savings as an added bonus.
However, it’s important to let you know that most of these fintech apps are using black market rate to offer their naira-to-dollar exchanges. All you need to do to get started is download any of your preferred apps on your phone app store and complete account registration. After that, fund your account with Naira and convert it to dollar. Once the transaction is done, the app will automatically convert your naira to dollars based on the current exchange rate. You can now hold onto it for as long as you wish before converting it back to Naira and transfer it to your naira bank account.
5 Best Fintech Apps to Save Naira in Dollars
1. Cowrywise: This is a popular Nigerian fintech app that offers various savings and investment options, including naira to dollar savings. You can easily save in dollars through the app’s Dollar Savings feature, which allows you to convert your Naira savings into dollars and vice versa.
2. PiggyVest: Formerly known as Piggybank, PiggyVest is a leading savings and investment platform in Nigeria. While primarily focused on Naira savings, PiggyVest also offers a feature called Flex Dollar, which allows users to save in dollars and earn interest on their dollar savings account.
3. Chipper Cash: Chipper Cash is a fintech platform that enables cross-border payments and money transfers in Africa. While it’s primarily known for its money transfer services, Chipper Cash also offers a feature called Dollar Account which allows users to save in dollars directly by converting naira to dollar within the app and via USDT.
4. Grey.Co: This is another fintech app in Nigeria that allows naira to dollar savings to go against inflation in Nigeria. You can simply receive dollar from abroad using this app, you can also send naira to it and convert it to dollar.
5. Bundle Africa: The Bundle Africa app transcends being merely an online savings platform; it also functions as a crypto wallet, enabling users to purchase and store stable cryptocurrency assets such as USDT. You can enjoy a competitive of 6% annual interest rate on your naira-to-dollar savings on Bundle Africa.
Notably, all these fintech applications are accessible for download on both the Google Play Store and Apple App Store. Simply download, install, register, and fund your account to begin. From there, you can seamlessly convert your funds into dollars or any stable cryptocurrency of your choice.
How to save Long-term in foreign currency in Nigeria
Saving long-term in foreign currency in Nigeria requires strategic planning and consideration of various factors. Here are steps to help achieve this:
1. Set Clear Goals: Define your long-term financial goals and objectives for saving in foreign currency. Whether it’s for education, retirement, or investment, having clear goals will guide your saving strategy.
2. Choose the Right Currency: Select a stable and widely-accepted foreign currency for long-term saving. Popular options include the US Dollar (USD), Euro (EUR), or British Pound (GBP).
3. Open a Foreign Currency Account: Many banks in Nigeria offer foreign currency accounts (DOM) denominated in major currencies. Choose a reputable bank and open a dedicated account for your foreign currency savings.
4. Regular Savings Plan: Establish a disciplined savings plan where you set aside a portion of your income regularly for foreign currency savings. Automate this process if possible to ensure consistency.
5. Monitor Exchange Rates: Stay informed about exchange rate fluctuations and consider timing your currency conversions strategically to maximize savings. Take advantage of favorable exchange rates when converting Naira to foreign currency.
6. Diversify Investments: Explore opportunities to invest your foreign currency savings in assets such as foreign stocks, bonds, or mutual funds. Diversifying your investments can help spread risk and potentially enhance returns over the long term.
7. Consider Forex Trading: If you have a good understanding of the foreign exchange market and are willing to take risks, consider forex trading as a way to grow your foreign currency savings over time.
8. Seek Professional Advice: Consult with financial advisors or experts specializing in foreign currency savings and investments for personalized guidance tailored to your
Practical tips for everyday saving in dollars as a Nigerian
1. Track Expenses: Keep track of your daily expenses and identify areas where you can cut back. This awareness will help you allocate more funds towards dollar savings.
2. Set a Budget: Establish a monthly budget that includes a specific amount for dollar savings. Stick to this budget diligently to ensure consistent savings.
3. Automate Savings: Set up automatic transfers from your Naira account to your dollar savings account. This ensures that a portion of your income is allocated to dollar savings before you have a chance to spend it.
4. Avoid Impulse Purchases: Resist the temptation to make unnecessary purchases. Before buying something, ask yourself if it aligns with your financial goals and if it’s worth sacrificing your dollar savings for.
5. Take Advantage of Discounts: Look for discounts, coupons, and promotional offers when making purchases. Saving on everyday expenses leaves you with more funds to allocate towards dollar savings.
6. Shop Wisely: Compare prices before making purchases and opt for quality items that offer long-term value. Avoid overspending on luxury items and focus on essentials.
7. Cook at Home: Reduce dining out expenses by preparing meals at home. Not only is this more cost-effective, but it also allows you to control portion sizes and ingredients.
8. Limit Credit Card Usage: Minimize the use of credit cards, especially for non-essential purchases. Paying with cash or debit cards helps you stay within budget and avoid accumulating debt.
9. Prioritize Saving: Make saving a priority in your financial planning. Treat dollar savings as an essential expense rather than an afterthought.
10. Review and Adjust: Regularly review your spending habits and savings progress. Adjust your budget and savings goals as needed to ensure you’re on track to meet your objectives.
By implementing these practical tips, you can cultivate a habit of everyday saving in dollars as a Nigerian, ultimately building a more secure financial future for yourself.
Final words
In light of the ongoing foreign exchange manipulations impacting the free fall of the Naira, it’s imperative for individuals in Nigeria to consider alternative strategies for saving in dollars. One effective approach is leveraging fintech applications that offer the option to save in stable cryptocurrency assets like USDT. By utilizing such platforms, individuals can safeguard their funds against the volatility of the Naira, ensuring greater stability and security for their savings.
Additionally, exploring investment opportunities in assets that are less susceptible to FX manipulations, such as real estate or foreign-denominated securities, can further mitigate the risks associated with the fluctuating currency market. Ultimately, diversifying savings and investments across multiple currencies and asset classes can provide a hedge against the adverse effects of FX manipulations, enabling individuals to preserve and grow their wealth amid challenging economic conditions.