Monday, February 23, 2015 5.35PM / Research
A review of events in the market today, concerning the activities at the foreign exchange market confirmed the following key developments:
• The naira exchanged at N219.8/$1 to slightly improve the rate of N221.8/$1 as at Friday.
• Forex scarcity which dominated the market throughout last week has eased as demand is now modest, but how this tempo will be sustained remains to be seen in days to come.
• The interbank market closed today at N200.60 to a dollar
• The naira traded against the Pounds sterling at N328/£1 while the Euros traded at N251/€1
Today, the naira exchanged for N219.8 to a dollar in the parallel market as forex scarcity eases amid modest demand while the pounds sterling traded around N328 to one pound, to retain the position as at Friday.
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 N219.8 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% and the falling value of the naira, the CBN has technically devalued the naira again by closing the rDAS window and restricting dollar sales to only genuine and legitimate demands. The apex bank is now taking measures to ensure the national does not depreciate further.
The value of the naira has since the CBN devaluation traded between N173 and to a N221.8/US$1. 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 remained stable at the official rate of N168/$1.
Oil price has also witnessed heavy decline since the last quarter of 2014. The commodity price recorded a loss of -1.75%, when compared to friday price of $60.16, to trade at $59.11 as at 10.50ET on February 23rd, 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 USD59.11/bbl while the other variant of crude (WTI) traded at $49.11 per barrel.
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. Heard on the Street - People are avoiding the pounds as dollar drops