Naira Hits N1,845/€ on Easter Monday as Euro Climbs to 3-Year High Against the Dollar

On Easter Monday, the Nigerian naira traded at N1,845 against the euro on the black market, marking a slight decline from its previous N1,800/€ support level. This drop came despite the euro’s surge against the U.S. dollar, which reached its highest point in three years. As market activity indicated a continued rise in the EUR/NGN exchange rate, the Nigerian currency’s fragility became evident in the unofficial foreign exchange markets. The Central Bank of Nigeria has imposed tight restrictions on the official forex market, limiting the availability of foreign exchange for imports and personal travel allowances.

The euro’s rise against the dollar was driven by increasing trade tensions between the U.S. and its allies, including China, alongside a weakening dollar. The euro surged by 1%, surpassing the expected 1.15 mark against the dollar, its strongest position since 2022. The U.S. Dollar Index (DXY), which measures the dollar’s strength against major currencies, fell to 98.2, the lowest level since March 2022, reflecting growing investor preference for the euro amid global geopolitical uncertainty.

Concerns over U.S. monetary policy also added to the weakening of the dollar. U.S. President Donald Trump’s investigation into the potential removal of Federal Reserve Chairman Jerome Powell sparked fears that such an action could erode investor confidence in U.S. financial markets. Critics, including U.S. Senator Elizabeth Warren, warned that tampering with the Fed’s independence could lead to a financial disaster, undermining both market stability and the credibility of the U.S. economy.

Despite the rising euro and continued challenges in the global financial landscape, experts argue that a competitive naira is essential for Nigeria’s economic growth and transition to a more diversified, capital-rich economy. The ongoing depreciation of the naira, coupled with the escalating global trade tensions, highlights the need for comprehensive policies to stabilize the Nigerian currency and foster economic resilience.

Source: Nairametrics