April 7, 2025
The new tariff threats from Donald Trump has sent ripples through emerging markets putting Nigeria’s financial markets under pressure as global shocks triggered.
Local bond and currency markets opened on Monday morning to intense volatility, following uncertainties across global financial markets.
Central Bank of Nigeria, CBN, sold a hefty $124 million at exchange rates ranging between N1,595 and N1,611 per dollar, before 10am in a coordinated effort to manage rising demand pressure in the FX market.
READ MORE; FG Reacts To Trump’s 14% Tariff On Nigerian Exports
The intervention is addition to the $197 million previously reported on Friday, marking an indication CBN’s aggressive stance to steady the naira.
However, naira has remained under significant pressure as buyers in the market pushed rates even higher. The sharp spike in demand and thin liquidity levels point to growing uncertainty in the foreign exchange market, likely exacerbated by both local and international developments.
Meanwhile, in the sovereign debt space, on Monday, Nigeria’s Eurobond prices dropped by as much as $5, with yields spiking to 12%, indicating a steep rise in the cost of borrowing.
The selloff, which began late last week, intensified as trading opened globally, with investors avoiding high risk assets amid fears of a renewed global trade war in response Trump’s tariff.
READ MORE; Trump Tariffs: China retaliates with 34% tariffs on US imports.
The price declines were peculiar across different maturities, underscoring a deepening loss of confidence, not necessarily tied to any fundamental deterioration in Nigeria’s economic position, but rather to broader market risk aversion.
Global markets were rocked by Donald Trump’s announcement last week of sweeping tariffs, including a proposed 10% across-the-board levy on all imports, and targeted duties on Chinese and Mexican goods.
