Monday, February 16, 2015 6.40PM / Research
A review of prices in the market today, following the activities at the foreign exchange market confirmed the following key developments:
• The Central Bank of Nigeria today sold dollar to dealers @ N198 to a dollar
• Wider margin was observed in the parallel market as operators buy at N209 and sell around N214 to a dollar
• The interbank rate for naira-dollar differential closed at N199.50
• The growing demand for dollar warranted the CBN to make sales to curb the speculative pressures on the naira
Today, the naira exchanged for N214 to a dollar in the parallel market as forex scarcity deepens.
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 N214 to a dollar. The value of the naira has depreciated significantly mainly because of the dwindling oil revenue from falling global oil prices and speculative pressures on the naira. Some analysts are beginning to call for more devaluation following the initial devaluation of the naira by 8%.
The value of the naira has since the CBN’s devaluation traded between N173 and N214 to a dollar in the black market. The Nigerian naira traded at N214/USD1 today, to record a new low. The graph above 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 of N168/$1 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 recorded a gain of 0.91% to close at $61.77 today, February 16th, 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.
Today, the price of Brent Crude oil (Nigeria’s crude oil type) was $61.77 while the other variant of crude (WTI) traded at $52.78 per barrel the previous day.
To View Commodity Prices Click Here..
1. Interbank Market resumes trading at N206.35 - $1 after circuit breaker
2. Exchange rate: Gap in Interbank and Black Market shrinks as Scarcity looms
3. Naira-Dollar differential rises further; interbank market suspended as panic sets in
4. Nigeria shuts down the Interbank Market - Naira oversold a
5. Fx, fx and fx yet again - CBN has to allow the Naira
6. Heard on the Street - People are avoiding the pounds as dollar drops