Dollar records strong demand as CBN defends the Naira further

Forex
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Tuesday, February 17, 2015 5.45PM / Research

 

A review of prices in the market today, following the activities at the foreign exchange market confirmed the following key developments:

         The Nigerian currency exchanged for N214.50 to a dollar today in the parallel market

         Scarcity of foreign currencies continues in the parallel market as demand soars

         The interbank rate for naira-dollar differential closed at N199.87

         The Central Bank of Nigeria intervened in the currency market for the third consecutively day

 

Today, the naira exchanged for N214.50 to a dollar in the parallel market as forex scarcity continues while the pounds sterling traded for N320 to one pound.

 

EXCHANGE RATE

Our daily exchange rate monitor of the performance of the naira against the dollar following the devaluation of the Nigerian currency in November 2014 continues to highlight how the naira has fared against the dollar over the months.

  

 

Today, the naira traded at N214.50 to a dollar. The value of the naira has depreciated significantly mainly because of the dwindling oil revenue from falling global oil prices and speculative pressures on the naira. Following the initial devaluation of the naira by 8% and the falling value of the naira, some analysts have predicted more devaluation in weeks to come


Source: Fieldwork


The value of the naira has since the CBN’s devaluation traded between N173 and N214.50 to a dollar in the black market, recording a new low today. The Nigerian naira traded at N214.50/USD1 today, to record a new low. The graph above shows in pictorial form the volatility of the naira against the dollar in the black market for the last 3weeks while the CBN official rate has remained fairly stable at the official rate of N168/$1 within the same time period.

 

OIL PRICE
Oil price has also witnessed heavy decline since the last quarter of 2014. The commodity is however beginning to gain some momentum though it recorded a loss of -1.5% to close at $60.86 today, February 16th, 2015. The initial huge decline in oil price caused the Federal Government of Nigeria to review downwards its benchmark oil price for 2015 budget.

 

The benchmark oil price for the yet-to-be-passed 2015 budget is $65. You would recall that the Federal government 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.



Today, the price of Brent Crude oil (Nigeria’s crude oil type) was $60.86 while the other variant of crude (WTI) traded at $52.78 per barrel the previous day.

 

To View Commodity Prices Click Here.. 


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