By David Akinmola
The naira depreciated to N1,375 against the dollar at the foreign exchange market as renewed tensions in the Middle East triggered fresh pressure on emerging market currencies and strengthened demand for the United States dollar.
Market operators said the local currency came under pressure following heightened geopolitical concerns that boosted investor preference for safe-haven assets, particularly the dollar.
The development also reflected sustained demand pressure in the foreign exchange market despite ongoing interventions by the Central Bank of Nigeria (CBN) aimed at stabilising the naira.
Currency traders noted that the dollar remained firm globally as investors reacted to growing uncertainty in the Middle East, leading to increased volatility across international financial markets.
Analysts warned that prolonged geopolitical tensions could further affect capital flows into emerging economies, including Nigeria, while exerting additional pressure on foreign exchange reserves and import costs.
They added that fluctuations in global oil prices linked to the crisis may also influence Nigeria’s external earnings and exchange rate outlook in the coming weeks.
The naira has continued to experience intermittent volatility amid foreign exchange demand pressures, inflation concerns and uncertainties surrounding global economic conditions.
Financial experts, however, said ongoing reforms in the foreign exchange market and improved dollar inflows could help moderate pressure on the local currency over time.
The CBN has repeatedly maintained that its policy measures are targeted at improving liquidity, boosting market confidence and achieving long-term exchange rate stability.
