Naira Reacts to Trump’s Threats, Crashes Against US Dollar
- Threats of military invasion against Nigeria by Donald Trump, the United States president, have affected the naira exchange rate
- The stock market also reacted negatively to the U.S. president's warning to the Nigerian government on the alleged Christian genocide
- Economic expert, Muda Yusuf, told Legit.ng that Donald Trump's plan carries far-reaching implications for the Nigerian economy
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends
Recent statements by US President Donald Trump hinting at potential military measures in Nigeria rattled financial markets on Monday, November 3.
Latest data from the Central Bank of Nigeria showed that the naira in the foreign exchange (FX) market felt the impact of the threat as it slipped by N14.56 or 1.02% to N1,436.34/$1, down from N1,421.78/$1 at the close of trading last Friday.
Source: Getty Images
The naira also lost ground against other major currencies in the official FX market.
It fell by N22.11 against the British pound, closing at N1,885.77/£1, compared with N1,863.66/£1 in the previous session.
Against the euro, it weakened by N12.98, ending at N1,653.37/€1, down from N1,640.39/€1.
Also, GTBank quoted the US Dollar at N1,440/$1, but in the parallel market naira declined by N4, closing at N1,445/$1, compared with N1,440/$1 the day before.
Stock market falls
Similarly, the Nigerian stock market fell due to heavy profit-taking in most of the key sectors.
At the close of business, the 387.34 points to 153,739.11 points from 154,126.45 points and the market capitalisation contracted by N246 billion to N97.583 trillion from the N97.829 trillion it ended last Friday.
Source: Getty Images
Economist expresses concern about Trump
Meanwhile, the Centre for the Promotion of Private Enterprise (CPPE) has warned that recent threats of military action against Nigeria by the US could have far-reaching economic consequences.
Trump had directed the US Defence Department “to prepare for possible action” and warned of an immediate suspension of aid to Nigeria.
Muda Yusuf, CPPE’s director/CEO, told Legit.ng that Trump's threat would lead investors to adopt a wait-and-see posture, delaying or cancelling major projects.
He said:
Private equity and venture funds may diversify away from Nigeria toward peer economies in Africa or Asia with lower perceived political risk."
Trump threatens 10% tariff on Nigeria
Earlier, Legit.ng reported US President Donald Trump's warning that he would levy an additional 10% tariff on Nigeria for joining BRICS.
President Trump declared that Nigeria would be one of several nations subject to an extra 10% tariff for supporting what he called the "anti-American policies of BRICS."
Global trade relations are now even more unpredictable after the U.S. president made the announcement in a post on Truth Social.
Trump's remark, which did not go into detail about any particular BRICS policy
Source: Legit.ng
