Buy and sell rates: why a bank’s rate differs from the official one
When you change money in Nigeria, the rate you are offered often differs from the official rate published by the Central Bank of Nigeria. That gap is not a mistake or a trick. It reflects how a bank or a bureau de change covers its costs and manages risk. This guide explains the difference in plain terms, so you can compare offers with confidence and see whether a deal is good or poor.
Why a buy rate sits below the official rate
An institution that takes your foreign currency is buying it from you. To protect itself, it pays less than the official rate. The currency may move against it before it can be resold, and holding cash carries risk. There are also handling costs, transport, security and storage. The difference between the official rate and the buy rate is the spread, and it helps cover those costs.
Why a sell rate sits above the official rate
When the same institution sells foreign currency to you, it charges more than the official rate. Again, the spread is the buffer. It pays for the risk of holding stock, the cost of moving cash, and the work of serving customers. The sell rate is always higher than the buy rate, and the gap between them is how the business earns its margin.
Fees can be added on top
Some providers add a separate charge, such as a commission or a handling fee, on top of the spread. Others build everything into the rate. A low headline rate with a large fee can cost more than a slightly worse rate with no fee. Always ask what the total cost is, not just the rate.
How to compare offers
Ask for the rate and the total amount you will pay or receive, and get both in writing. Then use the official rate published on this site to convert the same amount. The difference between the official figure and the offer shows the true cost of the deal. Do this for each provider and compare the results side by side.
What a better or worse deal looks like
A better deal keeps the gap between the official rate and the offered rate small, and it has few or no added fees. A worse deal shows a wide gap, hidden charges, or a total that is far from the official conversion. If the difference is large, the deal is expensive, whatever the headline rate suggests.
Keep the comparison simple
Write down the rate, the fee and the final total for each offer. Convert with the official rate yourself and note the difference. That habit turns a confusing set of numbers into a clear choice, and it helps you avoid paying more than you need to when you buy or sell foreign currency.
Related pages
Sources
Every figure on this page points here by its number.
- 1Central bankCentral Bank of Nigeriacbn.gov.ngofficial rates, once a working day
- 2ReferenceFrankfurter, reference rates of central banks (ECB-based)frankfurter.devCAD and AUD per dollar, for the rows worked out through the dollar
- 3WidgetTradingViewtradingview.comthe live widget only; never a printed figure