Forex Scarcity Hits Lagos: N210/USD1, N310/GBP as BDCs Complain

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Thursday, January 29, 2015, 6:25 PM / Research

 

The Naira/USD exchange has defiled the CBN no-panic-call as the Nigerian currency continues to trade far above its official rate of N168 to a dollar. This is against the recent call made by The Central bank Governor to Nigerians not to panic over the recent depreciation of the Naira. The Nigerian currency exchanged for N187.30 at the interbank market against the dollar while the black market rate was N210.

 

The wide margin between the official and black market rate makes it easier for BDCs to exploit by buying very cheap from CBN and selling with a wide margin.



The Nigerian Naira also exchanged for N310/GBP today as the naira depreciates further.

 

EXCHANGE RATE

Our daily 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 last two.

 

Today the naira traded for N210 to a dollar, a point above the N211/$1 it traded on Wednesday. The jack in the exchange rate differential is being compounded by the new CBN directive to stop dollar sales to BDCs as scarcity hits the forex market.



The value of the naira has since the CBN’s devaluation traded between N173 and N211 to a dollar in the black market. It however recorded a new low of N210/$1 today. The graph below 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 within the same time period.




OIL PRICE

Oil price has also witnessed heavy decline since the last quarter of 2014. The commodity has dropped significantly from above $100 to $43.24 as at Wednesday, January 28th, 2015. The downward slide 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. Yesterday’s price of Brent Crude oil (Nigeria’s crude oil type) was $49.14 while the other variant of crude (WTI) traded at $44.45 per barrel on the same day.



# Proposed oil price benchmark for Nigeria's 2015 budget

* Difference between Nigeria's benchmark and oil prices

 Brent Price is as at 14:46:57 GMT- Jan -28, 2015

**Crude Oil (WTI) figure was as at end of day Jan -28, 2015

 

To View Commodity Prices Click Here.. 


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