Nigeria’s currency weakened at the official foreign exchange market on Tuesday, crossing the ₦1,400 per dollar mark amid ongoing volatility in global markets.
Data from the Nigerian foreign exchange market showed that the naira traded at ₦1,401.4 per dollar, reflecting a 4.09 per cent depreciation from ₦1,346.32 recorded on February 20.
The figures also indicated that the exchange rate had earlier moved above the ₦1,400 threshold on Monday when the local currency exchanged at ₦1,405.62 against the US dollar.
The development marks the first time the naira has returned to the ₦1,400 range since January 27, when it traded at ₦1,401.2 to the dollar at the official market.
At the parallel market, the naira also recorded a slight depreciation, weakening to ₦1,440 per dollar from ₦1,430 traded the previous day.
Market watchers link the movement in the foreign exchange market to growing geopolitical tensions involving the United States, Iran, and Israel, which have triggered uncertainty across global financial markets.
The tensions contributed to a sharp rise in global oil prices, with crude oil climbing to $100 per barrel on Monday — the highest level recorded since July 2022 — before easing to about $87 per barrel on Tuesday.
Analysts say fluctuations in crude oil prices could influence Nigeria’s foreign exchange market, given the country’s reliance on oil exports for foreign earnings.
Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise said rising oil prices typically strengthen Nigeria’s external position by improving foreign exchange inflows.
He noted that higher crude prices could support the country’s current account balance and boost FX liquidity, potentially easing short-term pressure on the naira and restoring investor confidence.
However, Yusuf also warned that geopolitical instability often leads to increased risk aversion among global investors, which could trigger volatility in emerging markets, including Nigeria.