Wednesday, February 25th, 2015 4.26PM / Research
A review of today’s activities with respect to events at the foreign exchange market confirmed the following key developments:
• The naira exchanged at N223/$1 to slightly worsen the previous day position by -0.45%, when it traded for N222/$1.
• High margin exist between the buy price of N205.00/$1 and sell price of N223/$1 among the BDCs
• Low demand still dominates the forex market due largely to the prevailing high exchange rate.
Today, the naira exchanged for N223 to a dollar in the parallel market as low demand dictates the tone of the market.
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 N223 to a dollar. The value of the naira has depreciated significantly in the face of several measures by the CBN to stem the worsening value of the naira against major currencies in the world. Following the initial devaluation of the naira by 8%, the CBN has technically devalued the naira again by closing the rDAS window and restricting dollar sales to only genuine and legitimate demands. The new official Naira/USD exchange rate is now N199/$1.
The value of the naira has since the CBN devaluation traded between N173 and N223 to a USD1, as it records a new low today. The graph above 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, which has moved up from N168/$1 to N199/$1.
Oil price has also witnessed heavy decline since the last quarter of 2014. Today, the commodity recorded a loss of -1.60%, when compared to the previous day’s price of $60.12, to trade at $59.16 as at 10.05ET on February 25th, 2015. The initial huge decline in oil price caused the Federal Government of Nigeria to review downwards its benchmark oil price for 2015 budget.
Today’s Brent crude price is still below the $65 benchmark oil price for the yet-to-be-passed 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.
Today, the price of Brent Crude oil (Nigeria’s crude oil type) was USD59.16/bbl while the other variant of crude (WTI) traded at $49.16 per barrel.
To View Commodity Prices Click Here..
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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. Heard on the Street - People are avoiding the pounds as dollar drops