Naira records drastic depreciation amid Trump’s trade tariffs

Naira records drastic depreciation amid Trump’s trade tariffs

The Nigerian naira suffered its sharpest single-day decline in weeks towards the U.S. greenback on Thursday, following international financial tremors prompted with the aid of using new tariff bulletins from former U.S. President Donald Trump.

According to records from the Central Bank of Nigeria (CBN), the naira depreciated appreciably withinside the legitimate forex market, falling to ₦1,552. fifty three in keeping with greenback from ₦1,531.25 on Wednesday.

This marks a ₦21.28 loss in only 24 hours— the most important day by day hunch on the grounds that March 22, whilst the foreign money dropped with the aid of using ₦18.96.

The downward fashion prolonged to the parallel (black) market, in which the naira additionally weakened, buying and selling at ₦1,560 in keeping with greenback on Thursday in comparison to ₦1,555 the preceding day.

The sharp fall comes no matter encouraging records from the CBN displaying Nigeria’s Net Foreign Exchange Reserve (NFER) climbed to $23. eleven billion as of December 2024— the very best stage in extra than 3 years. However, analysts say international headwinds, especially Trump’s competitive exchange stance, have unsettled rising markets, which includes Nigeria.

Trump’s statement of a baseline 10% tariff on all U.S. imports on Wednesday despatched shockwaves via worldwide markets and drew tremendous complaint from exchange partners. In Nigeria, financial professionals say the coverage shift ought to harm exchange ties and region extra strain at the naira.

Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), warned in a assertion on Thursday that Trump’s price lists ought to correctly sign the stop of the African Growth and Opportunity Act (AGOA)—a U.S. coverage initiative that granted sure African nations, which includes Nigeria, duty- unfastened get admission to to the U.S. market.

“This ought to have implications for the naira change rate,” Dr. Yusuf said. “The lack of AGOA get admission to could lessen Nigeria’s export profits and growth exchange imbalances, probably weakening investor self belief and overseas inflows.”

Trade among Nigeria and the U.S. is presently worth over $10 billion. A widespread part of that hinges on preferential phrases made feasible with the aid of using AGOA.