Nigeria’s currency, the naira, weakened to ₦1,401.4 per dollar at the official segment of the foreign exchange (FX) market on Tuesday, extending its recent depreciation against the United States dollar.
Data obtained from the Nigerian Foreign Exchange Market (NFEM) showed that the naira has lost about 4.09 percent of its value over the past three weeks, falling from ₦1,346.32/$ recorded on February 20.
The figures also indicated that the exchange rate crossed the ₦1,400 mark on Monday, when the local currency traded at ₦1,405.62 per dollar.
The last time the naira traded in the ₦1,400 range was on January 27, when it exchanged at ₦1,401.2 per dollar.
Parallel market also weakens
At the parallel market, the naira also depreciated slightly, weakening by 0.70 percent to ₦1,440 per dollar, compared with ₦1,430 per dollar recorded on Monday.
The latest currency movement comes amid rising geopolitical tensions involving the United States, Iran, and Israel, developments that have unsettled global financial and commodity markets.
Oil prices surge
The geopolitical developments pushed global crude oil prices to $100 per barrel on Monday, the highest level since July 2022, before easing to about $87 per barrel on Tuesday.
Market analysts say fluctuations in global oil prices could significantly influence Nigeria’s foreign exchange dynamics in the coming weeks.
According to them, the direction of the naira will largely depend on how changes in oil prices affect Nigeria’s trade balance and foreign exchange inflows.
Experts weigh in
Reacting to the development, Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), noted that rising oil prices could offer short-term relief for the local currency.
“This could reduce short-term pressure on the naira and reinforce investor confidence,” he said.
Yusuf, however, cautioned that geopolitical tensions often trigger global risk aversion, which can also affect capital flows into emerging markets such as Nigeria.
