Naira Slips as Markets React to Trump’s Remarks
The naira came under renewed pressure on Wednesday, November 5, following U.S. President Donald Trump’s threat to cut off aid to Nigeria and his directive to the Pentagon to “prepare for possible action.”
His comments have stirred concerns about potential diplomatic tensions and economic fallout, with analysts warning of reduced investor confidence and slower dollar inflows into Nigeria.
Currency dealers in Abuja told Economic Confidential that the naira traded at ₦1,450/$1 for buying and ₦1,460/$1 for selling, after maintaining a steady rate of ₦1,455/$1 for two consecutive days — a depreciation compared to last week’s gain of ₦1,450/$1.
The traders, who spoke on condition of anonymity, said the development had triggered panic buying of dollars in the parallel market as speculators brace for further naira weakness.
“The black market reacts quickly to political uncertainty. Traders are holding dollars in anticipation of a decline,” a dealer told Economic Confidential.
Another trader noted that some buyers were hoarding dollars due to fears of the new tax policy expected to commence in January, which could push up the prices of food and other commodities.
At the official window, the local currency strengthened slightly to ₦1,433/$1, after weakening to ₦1,436/$1 on Monday.
Analysts expect the Central Bank of Nigeria (CBN) to intervene to stabilise the official rate, though they caution that persistent dollar shortages, strong import demand, and policy uncertainties could continue to pressure the naira in the long term.