Official Rate Moves to N196.95/$1 as High dollar demand eases

Forex
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Tuesday, June 02, 2015 4:46PM /Research

A review of today’s parallel market activities and oil price behaviour highlights the following:

  •        
Today, the naira traded at N217.00 to a dollar with no price changes as the exchange rate remains flat compared to its previous day value. Today’s fieldwork shows that major participants constitute those buyers who must do business in foreign currency.

  •         The existing low level of activities remains unchanged as only autonomous demand levels exist.

  •         The Naira exchanged against the pounds sterling around N331/£1 with no major drift while Naira/Euro rate traded at N242/€1.

  •         Official CBN dollar rate moves to N196.95/$1.

 
         Brent crude price was at $65.05 per barrel as at 10.28ET.


EXCHANGE RATE
Today, the naira exchanged at N217.00 to a dollar. The Nigerian currency closed flat when compared to its previous day value. The official Naira/USD exchange rate, however, moves to 196.95/$1 to reflect the dwindling demand for dollar.

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.


Source: Fieldwork


OIL PRICE
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 0.31% against the previous price of $65.25 to close at $65.05 per barrel. 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 $12.05 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 USD65.05 per barrel while the other variant of crude (WTI) traded at $60.64 per barrel as at 10.28ET.

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