Naira Plunges by 1.4% as Higher Tariff Hits Nigeria’s Exports
The naira plunged sharply at the official FX window after the U.S imposed 14% tariff on Nigeria export stoke fear of lower foreign receipts. Hence, the volume of US dollar demand by eligible participants rose sharply, eclipsed the amount of hard currency in the supply side and forced the value of the local currency downward.
Hence, the naira lost N21.28 or 1.39% to close at N1,552.53 in the official market, according to spot FX data obtained from FMDQ platform. FX transactions consummated in the official widow fluctuated between N1,535 and N1,570.00 On Thursday.
In the parallel market, exchange rate closed at N1,550 per US dollar in the absence of demand pressures. Consequently, the spread between the two markets narrowed to 0.16% from 1.22%.
Oil prices plunged on Thursday, marking their steepest percentage drop since 2022, after OPEC+ unexpectedly decided to increase output following U.S. President Donald Trump’s announcement of broad new import tariffs.
Brent crude settled at $70.14 per barrel, down $4.81 or 6.42%, while WTI crude closed at $66.95, losing $4.76 or 6.64%. Meanwhile, gold prices pared losses after initially dropping over 2% from a record high, as a broader market selloff impacted bullion traders.
Spot gold fell 0.85% to $3,106.99 per ounce, after reaching a record $3,167.57 earlier in the session following reciprocal tariff announcement that impact 180 countries.
on April 2, US President Donald Trump has imposed a 10 percent “minimum baseline tariff” on all imports into the country with many nations, including Nigeria, facing even higher rates.
Trump announced the long anticipated raft of tariffs on Wednesday, a day he termed “Liberation Day”, stating that the policy will erase trade imbalances between the US and other nations.
President Trump introduced two types of tariff. The first tariff imposes a 10 per cent flat tax on every import entering the US. The second set is the reciprocal tariffs, which specifically target imports from 60 nations.
Several African countries are affected by the reciprocal tariff, with Nigeria facing a 14 percent import duty, the second highest among West African countries after Cote d’ Ivoire which faces 24 per cent.
The tariffs in expected to impacts exports receipts from the United States, one of the key trading partners for Nigerian export commodities – primarily oil exports. Oil receipts is expected to feel the impacts, and this could impacts external reserves accretion, analysts said. #Naira Plunges by 1.4% as Higher Tariff Hits Nigeria’s Exports NGX is Bleeding, Equities Investors Exiting Positions
