The Naira traded at N1,401.4 per dollar at the official section of the foreign exchange (FX) market on Tuesday.
According to data obtained from the Nigerian foreign exchange market (NFEM) — the country’s official window — the naira depreciated by 4.09 percent in the last three weeks from the N1,346.32/$ reported on February 20.
The data showed that the FX rate for the dollar crossed N1,400/$ on Monday, as the naira traded against the American greenback at N1,405.62/$.
The last time the exchange rate hit the N1,400 region was January 27, when the local currency traded at N1,401.2 against the dollar.
At the parallel section of the FX market, the naira depreciated by 0.70 percent to N1,440 per dollar — from N1,430 per dollar on Monday.
The development comes amid ongoing tensions involving the United States (US), Iran, and Israel, which have unsettled several global markets.
As a result, crude oil prices surged to $100 per barrel on Monday — the highest level since July 2022 — before easing to $87 on Tuesday.
Analysts say the movement in global oil prices could impact Nigeria’s FX market.
They predict that the naira may either strengthen or weaken against the dollar depending on the country’s trade balance.
Muda Yusuf, chief executive officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), said higher oil prices typically strengthen Nigeria’s current account balance and improve FX liquidity.
“This could reduce short-term pressure on the naira and reinforce investor confidence,” he said.
Yusuf also said geopolitical instability triggers global risk aversion.
The Cable
