New Exchange Rates for Naira Against Pound, Euro, USD As Oil Prices Rise Above $75 Budget Benchmark

• The naira held steady against the dollar and appreciated against the pound and euro in the official exchange market, helped by a rebound in global oil prices
• There were concerns after oil prices fell below the budget benchmark of $75 and were heading towards less than $60
• The Israel and Iran conflict has created a rebound, which has helped oil prices rise to near $80 per barrel

Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The rise in oil prices has helped the Central Bank of Nigeria (CBN) sustain strategic interventions in the foreign exchange market aimed at stabilising the naira and ensuring dollar liquidity.

Brent crude, the international benchmark for global oil prices, has risen to $77 per barrel, its highest level since early February, amid heightened tensions between Israel and Iran

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Reuters reports that West Texas Intermediate (WTI) crude for July was up $2.06, or 2.7%, to $77.20.

What oil price rally means for Nigeria

A sustained rise in crude oil prices has the potential to significantly benefit Nigeria's economy in several key ways.

Firstly, as a major oil exporter, Nigeria stands to increase its dollar earnings, which will boost its foreign exchange reserves, which are currently at $37 billion based on CBN data.

With the increase in forex, CBN will have enough dollars to defend the currency and sustain the much-needed stability to the country's exchange rates, which have been subject to volatility in recent years.

Naira trades below N1,600

Latest data from the CBN shows that the naira closed against the US dollar at N1,551/$ on Thursday, June 19.

This is the same rate the dollar exchanged on Wednesday after it improved by N11.08 from the N1,554.57/$1 it was traded on Tuesday.

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Access, Zenith, UBA, other sell dollar at new rates as naira depreciates again

This stable exchange rate in the official market is influenced by forex liquidity.

The naira also extended its gains against the pound sterling in the official market on Thursday, appreciating by N6.08 to sell for N2,084.12/£1, compared with Wednesday’s rate of N2,090.20/£1.

It also gained N2.48 on the euro, closing at N1,779.35/€1, up from Wednesday’s N1,781.83/€1.

Here is a snapshot of the latest exchange rates for the naira:

• CFA: N2.73
• Yuan/Renminbi: N215.56
• Danish Krona: N238.50
• Euro: N1,779.35
• Yen: N10.65
• Riyal: N412.89
• South African Rand: N85.72
• Swiss Franc: N1,895.55
• Pound Sterling: N2,084.12

Naira in the black market

In the parallel market, also known as the black market, it was a different story as naira returned to above N1,600, according to traders who spoke to Legit.ng.

Abdullahi, a BDC trader, explained that the exchange rate was adjusted due to increased demand for the dollar.

He said:

"On Thursday, we sold the dollar at N1,602/$1 and bought it at N1,592. The euro traded between N1,787 and N1,803, while the pound sterling was sold at N2,150/£1 and bought at N2,130/£1."

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CBN releases new exchange rate for Access, Zenith, UBA, other authorised dealers as naira crashes

Expert predicts new exchange rate

Earlier, Legit.ng reported that renowned Economist Bismark Rewane forecasted a strong naira performance for June and July.

The financial expert cited data indicating that the Central Bank of Nigeria has implemented effective measures to control the growth of the money supply.

He also provided insights into the movement of the inflation rate

Proofreading by James Ojo, copy editor at Legit.ng.

Source: Legit.ng