TARGET PRICE RANGE: N380 : $1 AND N480 : £1 AND N390 : €1
July saw the Naira depreciate heavily against our forecast of an appreciation in value, as CBN decided to sit back and test how long the naira could stretch. Occasionally, CBN injected some funds to save the Naira from an embarrassing rate of N350 to $1 but this had little impact on the depth of the crash. CBN had earlier given the market the impression that the required liquidity would be provided to the market whenever it was needed.

In August, AbokiFX research team has put together, factors they believe would impact the naira positively, helping it appreciate in the parallel market against the 3 major currencies:

1. CRUDE OIL PRICE AND VOLUME: The price of Brent Crude oil has lowered to an average of $45 per barrel this month and seems it will maintain this price range for the rest of August. This is above the $38 per barrel benchmark budget hence, should cover the loss in volume from disruptions in the Niger Delta region. This should help maintain a decent revenue for August and encourage CBN to increase its intervention fund. If this happens, abokiFX believes the FX market will witness improved liquidity in dollars which should help the naira appreciate.

2. INTERNATIONAL CURRENCY MARKET:
International major currencies like the GB pound (GBP), US dollar (USD) and Euro (EUR) have weakened heavily, especially the pound. This has helped naira maintain stability in the international market. This means the naira is trading better than expected against these currencies which helps improve how much revenue CBN receives from crude oil sales. AbokiFX believes this should take the pressure off the naira in August and improvements should be seen in the parallel market as naira appreciates.

3. BDC ALLOCATION: CBN has requested banks to supply all BDCs $30,000 on a weekly basis. AbokiFX believes this should massively boost the supply of dollars in the parallel market. Dealers have for a while had to source their own dollars off the parallel market. This will continue with an additional $30,000 weekly. Still not enough to meet the market demand, the fact that additional $30,000 will be turned over weekly, will encourage rate competition in the market, forcing the rates down which should help the naira appreciate.

4. SUMMER HOLIDAY AND OLYMPIC DEMAND WANES: As the summer holiday gradually draws to an end. Less demand for FX is expected here. Same goes for any demand for dollars for the Rio Olympics. AbokiFX expects naira to appreciate as returnees from holidays generate FX inflow to stimulate the market. This will create additional supply which should help the naira appreciate.

http://www.certifiednaija.com/2016/08/naira-to-appreciate-against-three-major.html

We are waiting.

This idea fit back arrow us in the future. This is what happen,when we have a president that cannot make decision.