Latest Exchange Rate: Naira Slips Against US Dollar Amid Middle East Crisis

The naira has come under renewed pressure in the foreign exchange market, depreciating to ₦1,385 per United States dollar as escalating conflict in the Middle East continues to rattle global financial systems.

The local currency, which had recently stabilised around ₦1,360/$, has weakened by about 0.3 per cent over the past two weeks, reflecting growing external shocks and domestic vulnerabilities.

Although Nigeria’s status as a major crude oil exporter has provided some insulation, the economy is beginning to feel the effects of heightened volatility in the global energy market.

The crisis has triggered sharp movements in oil prices, with Brent crude climbing above $103 per barrel amid fears of supply disruptions linked to attacks on energy infrastructure in the region.

Concerns have also intensified over shipping activities through the strategic Strait of Hormuz, a key route for global oil supply.

The pressure on the naira coincides with a spike in domestic energy costs, particularly petrol prices, which have risen by over 30 per cent in recent weeks.

This comes despite Nigeria recording a slight easing in inflation to 15.06 per cent in February, raising fears that the recent gains in price stability may be short-lived.

Market analysts at ForexTime Limited cautioned that rising fuel and transportation costs could trigger a broader increase in consumer prices.

“As these tensions escalate, mounting fears of inflationary shocks could force central banks to rethink their 2026 playbooks,” The PUNCH quoted a Senior Market Analyst for Africa, Matthew Anthony, as saying.

He added, “Ultimately, this has injected oil prices with monstrous levels of volatility… Iran’s attacks on energy infrastructure around the Middle East have intensified fears around supply shocks.”

Efforts to stabilise the oil market have so far yielded limited results.

The International Energy Agency announced its largest-ever oil release of 400 million barrels in a bid to ease supply pressures, while the United States issued a temporary waiver for continued purchases of Russian oil.

Despite these interventions, bullish sentiment in the oil market has persisted, keeping prices elevated in triple digits.

The ripple effects of the crisis are also evident in global monetary policy decisions.

On Tuesday, the Reserve Bank of Australia raised interest rates for the second consecutive meeting, signalling tightening financial conditions.

Attention is now focused on key central banks, including the Federal Reserve, European Central Bank, and Bank of England, amid shifting expectations around interest rate cuts.

Market projections for rate reductions by the Federal Reserve have weakened significantly, with traders now anticipating only one possible cut throughout 2026.

For Nigeria, analysts say the immediate challenge lies in how the Central Bank of Nigeria responds to the evolving situation.

The combination of a weakening naira and rising fuel costs could compel the apex bank to reconsider its earlier stance on easing interest rates and instead adopt tighter monetary measures to curb inflation.

“The brief tech rally in the previous session merely served as a small distraction with equities on the back foot amid the overall caution,” the report noted.

With external shocks intensifying and domestic pressures building, experts warn that Nigerian policymakers may face a difficult balancing act in the coming weeks.

The interplay between currency stability, inflation control, and global oil dynamics is expected to shape economic decisions, as authorities navigate what analysts describe as a period of “high-stakes” uncertainty.