Naira Opens Lower on I&E Forex Window on Monday

Naira Trades Lower on Monday on I&E Fx Window

The Nigerian Naira opened the day at N386.83 to a US dollar on the Investors and Exporters’ Forex Window on Monday, 0.04 percent lower than the N386.67 it opened on Friday.

On the parallel market, the local currency was exchanged at N455 to a US dollar, the same rate it was exchanged on Friday.

Against the British Pound, the naira also remained unchanged at N553 to a British Pound while it was traded at N490 to a Euro single currency.

The Nigerian naira remained under pressure as a series of factors like the slow down in foreign revenue generation, low fiscal buffer needed to cushion the effect of COVID-19 and restore investors’ confidence remains a concern.

The inflation rate rose to 12.40 percent in May, highlighting Nigeria’s precarious situation in a time when most nations are cutting costs to ease the economic burden on their citizens and stimulate growth from within.

The rising cost of goods and services is expected to weigh on consumer spending and further hurt new job creation. This is despite the central bank lowering interest rates by 100 basis points to 12.5 percent.

Few experts have said the reduction needs to filter through to lending rates where it matters to see a meaningful impact on the economy.

Also, the apex bank is yet to resume forex sales to the bureau de change operators in spite of the federal government now allowing partial movement. This continues to weigh on forex liquidity and naira value, especially with the number of foreign investors look to offset their naira and move their funds out of the country.