The Nigerian naira has experienced its sharpest depreciation against the dollar this week, dropping to a record low at the official foreign exchange market. According to data from the Central Bank of Nigeria (CBN), the naira fell to N1,552.53 per dollar on Thursday, a decline from N1,531.25 on Wednesday.
This marks a drop of N21.28 in a single day, representing the steepest decline since March 22, when the currency had weakened by N18.96 at the official market.
At the parallel market, the naira also faced pressure, weakening by N5 to N1,560 per dollar, compared to N1,555 the previous day.
The depreciation comes in the wake of the announcement by the administration of U.S. President Donald Trump regarding new tariffs. Trump’s 10 percent baseline tariffs, which could have significant implications for global trade, were met with widespread concern, especially for countries like Nigeria with significant trade relations with the U.S. Experts predict that Trump’s tariffs, which could impact $10 billion in U.S.-Nigeria trade, will have a direct negative effect on the Nigerian economy, particularly the exchange rate.
Despite the Central Bank of Nigeria’s announcement that the country’s Net Foreign Exchange Reserve (NFER) had reached $23.11 billion by the end of 2024, its highest level in over three years, the naira’s performance at both the official and parallel markets has been sharply negative.
CEO of the Centre for the Promotion of Private Enterprise (CPPE) Muda Yusuf, remarked that Trump’s tariffs would likely undermine Nigeria’s economic stability, especially with the end of the African Growth and Opportunity Act (AGOA), a trade initiative that has provided preferential trade access to U.S. markets for African nations, including Nigeria. Yusuf added that this could have serious repercussions for the naira’s value in the coming months.
