Despite the government's efforts to ensure a strong supply by selling U.S. dollars to Nigerian banks and allowing informal currency traders access to foreign exchange at the official rate, the outlook remains uncertain.
Comercio Partners recently indicated that the naira's worst-case scenario for the first half of 2025 is projected to be around the N1,700/$ mark.
The dollar index experienced a weekly decline due to a postponement of the U.S.-planned trade tariffs. The safe-haven currency lost traction after President Donald Trump expressed a more optimistic view, suggesting that the situation may not be as severe as expected and that a peace agreement between Russia and Ukraine could be possible.
Moreover, the dollar index fell to a nine-week low as traders increased their expectations that the Federal Reserve would implement two interest rate cuts this year, following data showing a larger-than-expected decline in retail sales for January. Market sentiment shifted, anticipating that tariff challenges would be less impactful, while optimism grew regarding a potential ceasefire between Russia and Ukraine.
Trump has instructed his economic team to devise reciprocal tariffs on all nations imposing taxes on the U.S. According to Howard Lutnick, Trump's nominee for commerce secretary, the administration will engage with each affected country, with research on the issue expected to be completed by April 1.
Additionally, Treasury Secretary Scott Bessent stated on Friday that the Trump administration would look into currency manipulation, extending beyond tariffs and non-tariff barriers. Tariffs could lead to increased inflation and bolster the dollar's strength as the Federal Reserve maintains elevated interest rates. Furthermore, Trump announced on Friday his intention to start imposing duties on imported automobiles on April 2.
Treasury Secretary Scott Bessent announced on Friday that the Trump administration plans to investigate currency manipulation, extending its focus beyond tariffs and non-tariff barriers. He noted that tariffs could lead to increased inflation and bolster the dollar's strength as the Federal Reserve continues to uphold elevated interest rates.
Additionally, Trump revealed on Friday his intention to impose tariffs on imported automobiles starting April 2.
Expectations for a peace agreement between Russia and Ukraine have positively influenced the euro and other European currencies.
According to U.S. producer pricing data for January, the Federal Reserve's preferred inflation measure, the core Personal Consumption Expenditures Price Index, is projected to be lower than previously expected later this month, following Friday's retail sales figures.
Trump reached out to Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin to discuss the ongoing situation in Ukraine.
The Central Bank of Nigeria (CBN) has issued a warning to Nigerian banks regarding ATM transaction fees.
The CBN emphasized that fees for on-site and off-site withdrawals from other banks are predicated on the assumption that users can withdraw a maximum of N20,000 per transaction.
The Nigerian Apex Bank pointed out that banks have the flexibility to charge lower fees based on their cost structures and business models. Nigerian banks and financial institutions are prohibited from exceeding the fees outlined in the circular, as these charges and surcharges are capped. However, a bank's operational costs and growth strategies may permit them to set lower fees. The CBN encouraged customers to use ATMs operated by their own banks to avoid incurring additional charges.
Furthermore, the Nigerian Central Bank advised users to consider alternative payment methods, including POS terminals, mobile banking applications, and other digital payment options.