Naira-Dollar differential rises further; interbank market suspended as panic sets in

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Wednesday, February 11, 2015 5.38PM / News


A review of prices in the market today, following the activities at the foreign exchange market confirmed the following obtained in the parallel (black) market:

 

         The exchange rate at the parallel market moved up again to N210/$1 as against the N209/$1 it traded yesterday

         The naira at the interbank market hit N205 to a dollar which triggered the interbank market suspension as traders went in for  an emergency meeting; and

         General market panic as rumours of more currency crisis dominates the media
 

Today, the naira exchanged for N210 to a dollar in the parallel market as the forex market came under serious panic of worsening currency rate both in the interbank market and black market.

The naira-pounds exchange rate also increased slightly to N310/1GBP in the black market.

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 N210 to a dollar. 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 N210/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
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 $53.58 on Tuesday, February 10th, 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.

 

On Monday, the price of Brent Crude oil (Nigeria’s crude oil type) was $58.26 while the other variant of crude (WTI) traded at $50.02 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 14:05:59 GMT- Feb -10, 2015

**Crude Oil (WTI) figure was as at end of day Feb -10, 2015

 

To View Commodity Prices Click Here.. 

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