Black Market activity resumes as Naira/USD rate remains indifferent

Forex
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Tuesday, May 26, 2015 4:46PM / Research

A review of today’s parallel market activities and oil price behaviour highlights the following:

  •         The black market experienced improved patronage after a near standstill situation experienced yesterday following the nationwide scarcity of petroleum products that hindered business operations and also grounded vehicular and human movement.

  •         Today, the naira traded between N219.50 to N220.00 to a dollar across major areas within Lagos with an insignificant price change compared to yesterday’s exchange rate of N219.50/$1 at the black market.

  •         The activity level however remains low across the black market

  •         Today’s exchange rate between Naira and pounds sterling is N340/£1 while Naira/Euro rate gyrates around at N241/€1. Some BDC operators are however boycotting trades in Euro for fear of further price drop.

  •         Official CBN dollar rate remains at N197/$1.

         Brent crude price was at $64.01 per barrel as at 10.32ET.

EXCHANGE RATE
Today, the naira exchanged at N220.00 to a dollar. The Nigerian currency closed at N220.00/$1 with a 0.23% decrease in value. The official Naira/USD exchange rate, however, remains at N197/$1.

The value of the naira has since the initial CBN devaluation in November 2014 traded between the band of N173 and N230 to USD1. The graph below shows in pictorial form the volatility of the naira against the dollar in the black market for the last 3weeks as it compares with the official rate.


Source: Fieldwork

OIL PRICE
Oil price continues to swing up and down in the international oil market following initial heavy decline since the last quarter of 2014. Today, the commodity recorded a marginal loss of 2.08% against the previous price of 65.37 to close at $64.01. Recall that the initial huge decline in oil price in late 2014 caused the Federal Government of Nigeria to review downwards its benchmark oil price for 2015 budget.

Today’s Brent crude price is $11.01 above the $53 per barrel oil benchmark price for 2015 budget. You would recall that the Federal government of Nigeria initially set the benchmark price for 2015 budget at $78 before the first downward review to $73 of which circumstances forced it to review further down to $65 per barrel, which was proposed in the submitted 2015 appropriation bill to the national assembly but was eventually passed at $53.



Today, the price of Brent Crude oil (Nigeria’s crude oil type) was USD64.01 per barrel while the other variant of crude (WTI) traded at $58.32 per barrel as at 10.32ET.

To View Commodity Prices Click Here.. 

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