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Naira Depreciates to N407/$ in the Parallel Market; Impact on Imported Commodities to be Felt in Sep


Friday, August 26, 2016 9:27am /fdc

The naira has taken another hit depreciating to N407/$ in the parallel market. The impact of this on imported commodities will be felt in September.

In the global commodity market, we have seen oil price rally reverse over rising inventory data in the United States.

Nigeria was unable to benefit from the rally thanks to the Avengers. Next month is the Algiers summit of oil producers which might offer some good news.  

The attached slides sum up the events that took place in the domestic and global commodity markets this week.

Domestic Commodities Market

•Commodity prices are choppy but flat

•Shortages likely again with forex market uncertainty

•Naira depreciated in both the IFEM and parallel market to N317/$ - 407/$

•Crossing the psychological resistance of N400/$

•Driven by CBN’s directive to suspend 9 banks from the market

•Diesel price down to N185/ltr

•Inflation numbers & GDP expected next week

Stock Market

•Equity market mixed

•NSE ASI appreciated by 0.25% to 27,880.46pts

•Caught between speculation and trading

Oil Prices

• Brent crude 0.12% to $49.10pb

• WTI 0.34% to $46.89pb

• Markets are awaiting Janet Yellen’s speech tomorrow

• Prices initially rose on news of Iran’s willingness to participate in September meeting

• Gains were capped by rising inventory data in the US

• Crude supplies increased by 2.5mb, gasoline inventories increased by 36,000 barrels

Oil Markets Today


•Iran’s economic problems hindering OPEC consensus

•Increase in inventory data a threat to price recovery

•Data on US rig count will determine the direction of oil prices in the near term

• Rising wheat production from the Black Sea Region and North America will suppress prices

• Slowing U.S corn production not enough to outweigh global corn supplies


• Bullish outlook for sugar as deficit numbers remain high

• Prices expected to increase as port arrivals in Ivory Coast continue to decline  

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