CBN Signals Possible Intervention as Middle East Tensions Pressure Emerging-Market Currencies

photo credit: premium Times Nigeria

The Central Bank of Nigeria (CBN) says it is prepared to intervene in the foreign-exchange market to stabilise the naira if global tensions trigger stronger pressure on emerging-market currencies.

Deputy Governor of the apex bank, Muhammad Sani Abdullahi, disclosed this during an interview in Abuja on Thursday, stating that contingency measures had already been put in place to manage potential volatility.

According to Abdullahi, the bank is closely monitoring developments in global financial markets as geopolitical tensions in the Middle East prompt investors to pull funds from riskier assets in emerging economies.

“The bank is ready to step in and smooth the market as much as possible,” he said.

Since the outbreak of the conflict on February 28, the naira has weakened by about 1.3 per cent against the United States dollar as global investors adopt a more cautious stance toward emerging-market assets.

Despite the decline, the Nigerian currency has remained relatively stable when compared with other major African currencies.

Data compiled by Bloomberg shows that while the naira recorded only a modest drop, the South African rand fell by about five per cent and the Egyptian pound declined by roughly 8.5 per cent during the same period.

Over the past three months, the naira has also been the least volatile among the three currencies, suggesting a degree of resilience despite ongoing global economic uncertainty.