Naira slips back above ₦1,400/$; and here’s why it may not bounce back quickly
The Nigerian naira crossed back above the ₦1,400 mark against the dollar at the official foreign exchange market on Tuesday, raising fresh concerns about the stability of gains Nigerians briefly enjoyed in recent weeks.
Data from the Nigerian Foreign Exchange Market (NFEM) showed the naira trading at ₦1,401.4 per dollar on Tuesday — a 4.09 per cent depreciation from the ₦1,346.32 recorded as recently as February 20. At the parallel market, the story was similarly grim, with the naira sliding to ₦1,440 per dollar.
The reversal is significant because it comes quickly after a period of cautious optimism. The Naira had been strengthening steadily, with some analysts and even President Tinubu projecting it could reach N1,000 to the dollar. That hope is now looking distant.
Part of the explanation lies in the Central Bank’s own strategy. By cutting interest rates by 50 basis points recently and actively mopping up dollars from the market to slow the naira’s earlier rally, the CBN inadvertently removed some of the conditions that supported the currency’s gains. The move was designed to protect foreign investors — a too-fast Naira appreciation would have encouraged early exits, draining FX liquidity. But the side effect is the current slide.
Global tensions are not helping either. The ongoing conflict between the US, Iran, and Israel has rattled currency markets worldwide, and Nigeria is not insulated.
Muda Yusuf of the Centre for the Promotion of Private Enterprise notes that higher oil prices, which typically follow Middle East tensions, could actually work in Nigeria’s favour by strengthening FX inflows.
But that relief is not guaranteed — and for ordinary Nigerians watching the cost of imported goods creep back up, the direction of the naira right now is the wrong one.
