The naira has weakened past the N1,400 mark against the US dollar at Nigeria’s official foreign exchange market, data shows, signalling growing pressure on the country’s local currency.
On Tuesday, the naira traded at N1,401.4 per dollar, down from N1,346.32 just three weeks ago. On Monday, the currency briefly reached N1,405.62 per dollar, marking its highest level since late January.
The black market also saw a decline, with the naira trading at N1,440 per dollar, compared with N1,430 on Monday.
Economists attribute the recent depreciation to geopolitical tensions involving the United States, Iran, and Israel, which have unsettled global financial markets.
Crude oil prices, closely linked to Nigeria’s foreign exchange earnings, surged to $100 per barrel on Monday, the highest since July 2022 before falling back to $87 on Tuesday.
Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise, said that while higher oil prices could strengthen Nigeria’s current account and improve foreign exchange liquidity, global instability continues to fuel market uncertainty.
“Rising oil revenues may ease short-term pressure on the naira, but geopolitical risks trigger caution among investors,” Yusuf noted.
With oil exports being a major driver of Nigeria’s foreign currency inflows, analysts warn that the naira could experience continued volatility depending on global market developments and the country’s trade balance.
