Naira Depreciates Slightly Against the US Dollar on I&E Fx Window

• Naira Depreciates Slightly Against the US Dollar on I&E Fx Window

Despite improved oil prices and surged in the foreign reserves by over $3 billion in the month of May, the Nigerian Naira depreciated slightly against the United States dollar on Wednesday, according to the Investors and Exporters Fx Window data published by the FMDQ Group.

The local currency was exchanged at N386.33 to a US dollar on the I&E Fx window following an increase in value from N389.99 it traded in the morning.

This was slightly lower than the N385.50 it was exchanged on Tuesday.

Accordingly, the volume traded declined by 28.3 percent from $31.40 million on Monday to $24.64 million Tuesday.

On the parallel market, the Naira traded at N445 to a US dollar on Wednesday, the same amount it traded on Tuesday.

Against the British Pound, the local currency was exchanged at N540 per Pound and N470 against the Euro single currency.

Naira, a crude oil-backed currency, is expected to improve in value with the rebound in oil price to almost $40 per barrel.

Earlier in April, currency traders exchanged the local currency at N570 to a US dollar in a five-year future contracts in London. According to them, weak foreign reserves and low oil prices would hurt the currency’s fundamentals going forward.

However, with crude oil trading at about $40 per barrel, the Nigerian Naira is expected to improve in value in the near-term, especially if OPEC and allies eventually agree to an extension of production cuts.