…Analysts warn of FX volatility
The Naira traded at ₦1,401.4 per dollar at the official foreign exchange (FX) market on Tuesday, marking a 4.09% depreciation over the past three weeks from ₦1,346.32/$ on February 20.
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the local currency crossed the ₦1,400/$ threshold on Monday, trading at ₦1,405.62/$. This is the first time the naira has hit this level since January 27, when it traded at ₦1,401.2/$.
At the parallel market, the naira weakened slightly by 0.70%, moving from ₦1,430/$ on Monday to ₦1,440/$ on Tuesday.
Experts attribute the currency’s fluctuation to geopolitical tensions involving the US, Iran, and Israel, which have unsettled global markets. Crude oil prices surged to $100 per barrel on Monday, the highest since July 2022, before easing to $87 on Tuesday – a factor that could influence Nigeria’s FX market depending on trade balances.
CEO of the Centre for the Promotion of Private Enterprise, Muda Yusuf, noted that higher oil prices can improve Nigeria’s current account balance and FX liquidity, reducing short-term pressure on the Naira. He, however, warned that geopolitical instability often triggers global risk aversion, which may continue to affect the local currency.
This development underscores the naira’s vulnerability amid global uncertainties, even as investors monitor oil price movements for potential relief.
