Monday, December 15, 2014 9.10 AM / Research
At the end of trading on Friday, we examine how the Naira has fared against the dollar barely three (3) weeks after the Central Bank’s devaluation of the naira.
The value of the naira in the parallel market (black market) has witnessed high volatility since the Central Bank of Nigeria devalued the currency on the 25th November, 2014
The value of the naira has since the CBN’s devaluation traded between N183 and N195 to a dollar in the black market. The graph below shows in pictorial form the volatility of the naira in the black market while the CBN official rate has remained fairly stable at the official rate.
Oil price has also witnessed heavy decline since the last quarter of 2014. The commodity has dropped significantly from above $100 to around $60.50 per barrel. This has caused the Federal Government of Nigeria to revisit its benchmark oil price for 2015 budget. There are fears that the price might drop yet further.
The newly agreed oil price is now $65. 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.
# Proposed oil price benchmark for Nigeria's 2015 budget
* Difference between Nigeria's benchmark and oil prices
Brent Price is as at 14:42:57 GMT- Dec -05,2014
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