Recent threats by US President Donald Trump to carry out military actions in Nigeria spooked the financial markets, with the foreign exchange (FX) market not left out, as the value of the Naira weakened across various windows on Monday, November 3.
The local currency declined against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) during the session by N14.56 or 1.02 per cent to N1,436.34/$1 from the N1,421.78/$1 it ended last Friday.
Also, the domestic currency lost N22.11 against the Pound Sterling in the official FX market to close at N1,885.77/£1 versus the preceding session’s N1,863.66/£1 and depleted against the Euro by N12.98 to settle at N1,653.37/€1, in contrast to the N1,640.39/€1 it traded at the last trading session.
At GTBank, the exchange rate of the Nigerian Naira to the US Dollar remained unchanged at N1,440/$1 yesterday, but tumbled against the greenback in the black market by N4 to close at N1,445/$1 compared with the N1,440/$1 it was exchanged in the previous trading day.
President Trump said he had instructed the US Defense Department “to prepare for possible action” and threatened an immediate cutoff in aid and assistance to Nigeria.
President Bola Tinubu has since rejected Mr Trump’s characterization of the country, saying he was disregarding “the consistent and sincere efforts of the government to safeguard freedom of religion and beliefs for all Nigerians.”
A possible dialogue between the country is expected in coming weeks, according to the Nigerian government.
Regardless of this, outlook for the Naira remained optimistic with the recent introduction of a 15 per cent import tariff on petrol and diesel expected to ease dependence on FX. Coupled with increased inflows from exporters, non-bank corporate, individuals and foreign investors, the local currency’s pros outweigh cons.
In the cryptocurrency market, investors’ sentiments remained negative after the worst October in a decade with over $100 billion loss printed among major assets.
The US Federal Reserve’s recent actions and cautious messaging have been identified as contributing to the broader risk aversion.
Solana (SOL) slipped by 11.1 per cent to $157.00, Binance Coin (BNB) slid by 8.5 per cent to $943.72, Litecoin (LTC) slumped by 7.7 per cent to $86.20, Cardano (ADA) depreciated by 7.4 per cent to $0.5340, and Ripple (XRP) went down by 7.0 per cent to $2.42.
Further, Dogecoin (DOGE) shrank by 6.7 per cent to $0.1662, Ethereum (ETH) depleted by 6.2 per cent to $3,490.37, and Bitcoin (BTC) depreciated by 2.9 per cent to $104,537.05, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.