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Black Market Exchange Rate
(redirected from Black Market Exchange Rates)

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Black Market Exchange Rate
An exchange rate for a currency that differs from the official exchange rate set by a government. The black market exchange rate occurs when the official rate bears little or no relationship to the currency's actual value. Using the black market exchange rate can be a punishable offense in the country issuing the affected currency.


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The move was taken by the central bank in an effort to prevent companies and individuals from illegally exploiting the gap between the official and black market exchange rates.
There is another part of the literature that includes studies that have used black market exchange rates in testing the PPP in less-developed countries (LDCs).
As in Eritrea at present, black market exchange rates are often far more favourable than official rates, so local people are obviously attracted by exchanging their money outside the official system.
 
 
 
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