Thursday, March 19, 2015 7.02PM/Research
A review of today’s activities with respect to events at the foreign exchange market confirmed the following key developments:
• Today, the naira exchanged at N225/$1 to appreciate by +0.66% when compared to the value of N226.50/USD1 it traded the previous day.
• The naira traded against the Pounds Sterling and Euro at N327 and N243 respectively.
• There was remarkable increase in demand for Euros in today’s trade at the BDCs
Today, the naira exchanged for N225 to a dollar in the parallel market while the pounds sterling traded for N327/£1 and N243/€1 for Euro.
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 and other currencies over the months.
Today, the naira traded at N225 to a dollar and has exchanged above N200 since January 22nd, 2015. The value of the naira has depreciated significantly in the face of several measures by the CBN to stem the worsening value of the naira against major currencies in the world. Following the initial devaluation of the naira by 8% coupled with the CBN’s technical devaluation by closing the rDAS window, the new official Naira/USD exchange rate is now N197/$1 as at today.
The value of the naira has since the initial CBN devaluation traded between the band of N173 and N230 to USD1. The graph above 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, which has moved up from N168/$1 to N197/$1.
Oil price has also witnessed heavy decline since the last quarter of 2014. Today, the commodity recorded a gain of +3.03%, when compared to the previous day’s price of $52.77, to close at $54.37. The initial huge decline in oil price caused the Federal Government of Nigeria to review downwards its benchmark oil price for 2015 budget.
Today’s Brent crude price is marginally above the newly agreed benchmark price of $53 per barrel by the national assembly. 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.
Today, the price of Brent Crude oil (Nigeria’s crude oil type) was USD54.37 per barrel while the other variant of crude (WTI) traded at $43.45 per barrel as at 12.42ET today.
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