Heard on the Street - People are avoiding the pounds as dollar drops

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Monday, February 09, 2015 2.12PM / News


A review of prices in the market today, following the activities at the Interbank confirmed that at 1406hours, the following obtained in the parallel (black) market


·         The Central bank intervened twice last week, releasing money to BDC’s on Wednesday and Friday to stabilise the market;

·         People are avoiding the GBP (pounds) and there has been little or no demand for it today; hence the prices are coming down; and

·         The dollar demand is also slowing down due to liquidity challenges.


Today, the naira exchanged between N207 and N208 to a dollar in the parallel market amid low demand from the Nigerian publics as against the N210/$1 it traded on Friday. The reduced naira/dollar exchange rate was also engineered by more injection of dollars by the CBN through increased sales to BDCs.


In a similar fashion, the Naira exchanged between N308 and N309 to 1GBP in the black market; a reduction that was ushered in by low demand for pounds.



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 N208 to a dollar for the seventh consecutive day. The value of the naira has depreciated significantly majorly because of the dwindling oil revenue from failing global oil prices.

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 traded at N208/USD1 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 has also witnessed heavy decline since the last quarter of 2014. The commodity is however beginning to gain some momentum as it traded for $50.81 as at Friday, February 6th, 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.


On Friday, the price of Brent Crude oil (Nigeria’s crude oil type) was $57.33 while the other variant of crude (WTI) traded at $51.69 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 14:26:59 GMT- Feb -06, 2015

**Crude Oil (WTI) figure was as at end of day Feb -6, 2015


To View Commodity Prices Click Here.. 

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