Black Market Exchange Rate

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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 PM said that the bank would unify the Egyptian pound's official and black market exchange rates as soon as possible.
Moody's in a commentary said that the CBE's decision, which came at a time of low net international reserves, slowing growth and a widening difference between official and black market exchange rates, is credit positive for Egypt (B3 stable) because it brings the official exchange rate closer to market rates.
Moody's, in a commentary, said that the CBE's decision, which came at a time of low net international reserves, slowing growth and a widening difference between official and black market exchange rates, is credit positive for Egypt (B3 stable) because it brings the official exchange rate closer to market rates.
Black market exchange rates are reportedly higher than 10 to 1 currently, and economist Hamid Eltigani, of American University in Cairo, Egypt, has warned that the rate could increase further and reach 20 to 1.
Choosing to not devalue the naira would lead to severe foreign exchange shortages that make it much harder to import goods into Nigeria and significantly reduce foreign investment, along with a surge in black market exchange rates.
He says the government of Venezuela asked Twitter to suspend an account that had announced black market exchange rates for the US dollar.
According to the IIF report, inflation has been declining steadily in recent months to 14 percent in August 2014, year-on-year, from 30 percent in December 2013, as a result of tighter credit conditions and stabilization of the official and black market exchange rates.
Signing of the interim agreement has already been reflected in some recovery in the local stock market, a tightening of the spread between the official and black market exchange rates and a drop in inflation.
The gap between the official and black market exchange rates of the Egyptian pound against the dollar, which almost disappeared in the initial weeks after Mursi was deposed, has widened since last week but remains under 2%.
Key words: financial integration, factor-market integration, trade productivities, 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).
Since then, however, concerns about the impact of war on the economy - and a degree of speculation - have meant some currency trading outside the banking system and a widening gap between the official and black market exchange rates.