The Nigerian naira experienced a significant setback on Friday, November 9, 2025, surrendering substantial ground against the US dollar amid rising global tensions and investor anxiety.
Market Reaction to Global Political Tensions
The local currency declined by ₦15 within a single trading day, closing at N1,436.58 per dollar compared to the previous day's rate of N1,421.73. This depreciation occurred despite the Central Bank of Nigeria's active intervention in the official market, where it sold $50 million to authorized dealers to stabilize the currency.
Investor Exodus and Geopolitical Concerns
Market analysts identified the primary driver behind the naira's weakness as heightened geopolitical tensions following controversial remarks from former US President Donald Trump regarding potential military intervention in Nigeria. The situation triggered cautious reactions from foreign portfolio investors, who began exiting their positions in Nigerian financial markets and repatriating funds to safer havens.
The foreign exchange market opened the week with significant losses as offshore investors became increasingly risk-averse. However, midweek brought some stabilization as certain international participants returned to engage with Open Market Operation instruments, while domestic demand for the naira provided additional support.
CBN's Strategic Response and Reserve Position
The Central Bank's $50 million injection to commercial banks proved crucial in containing speculative attacks on the national currency and maintaining adequate dollar supply. This intervention, combined with consistent inflows from both oil and non-oil sectors, helped reduce market volatility and ensured reasonable liquidity levels despite external pressures.
In a positive development for Nigeria's economic fundamentals, the country's external reserves increased by $43.2 million to reach $43.3 billion. This improvement reflects stronger capital inflows and enhanced fiscal buffers, partly supported by proceeds from the recently oversubscribed $2.35 billion Eurobond issuance.
Analysts from AIICO Capital Limited maintain that the naira is expected to remain stable in the near term, supported by sustained CBN policy measures and the positive impact of Eurobond inflows.
Commodity Markets and Global Context
Parallel developments in global commodity markets added complexity to the economic landscape. Oil markets endured a volatile week, with Brent crude eventually closing 1.76% lower at $63.63 per barrel, while US WTI crude slipped 2.02% to $59.75 per barrel. Gold prices also fluctuated significantly, with spot gold declining 2.56% week-on-week to $3,999.72 per ounce as investors sought safe-haven assets amid global uncertainty.
Despite the current challenges, the naira's recent performance context remains noteworthy. Earlier reports indicated that the currency ranked among Africa's ten best-performing currencies for October 2025, having appreciated by 3.4% from ₦1,478/$ to ₦1,427.50/$ following foreign exchange reforms implemented by the Central Bank.
Market observers suggest that while short-term stability is expected due to continued CBN interventions and improving external reserves, sustained global political tension and volatile oil prices could continue to influence currency performance in the coming weeks.
