Wednesday, May 27, 2015 4:36PM / Research
A review of today’s parallel market activities and oil price behaviour highlights the following:
• Today, the naira traded between N219.00 to a dollar with no significant price change compared to yesterday’s exchange rate of N220.00/$1 at the black market.
• The activity level in the parallel market remains very low for all foreign currencies as customers adopt a “careful buy” approach.
• The exchange rate between Naira and pounds sterling remains unchanged at N340/£1 while Naira/Euro rate is unchanged at N241/€1.
• Official CBN dollar rate remains at N197/$1.
• Brent crude price was at $62.96 per barrel as at 10.13ET.
Today, the naira exchanged at N219.00 to a dollar. The Nigerian currency closed at N219.00/$1 with a 0.45% increase in value compared to the yesterday. 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.
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 1.64% against the previous price of 64.01 to close at $62.96. 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 $9.96 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 USD62.96 per barrel while the other variant of crude (WTI) traded at $57.95 per barrel as at 10.13ET
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1. Naira/USD rate leaps to N220/$1 amid strong dollar demand