Tension at CBN as Naira Depreciates to Lowest Record; New Dollar Rate Emerges

On Tuesday, the naira was exchanging at a rate of N1,401.4 per dollar in the official segment of the foreign exchange (FX) market.

Recent data from the Nigerian Foreign Exchange Market (NFEM), the country’s official trading platform, indicates that the naira has experienced a depreciation of 4.09 percent over the past three weeks, falling from a rate of N1,346.32 per dollar reported on February 20.

Additionally, the FX rate for the dollar surpassed N1,400 on Monday, with the naira trading at N1,405.62 per dollar at that time.

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.