CBN Poised to Act as Middle East Turmoil Affects Emerging Market Currencies

The Central Bank of Nigeria (CBN) has revealed its preparedness to intervene in order to stabilize the naira as investors retreat from emerging markets.

In an interview held in Abuja on Thursday, Deputy Governor Muhammad Sani Abdullahi stated that the central bank has established contingency measures to protect the naira from potential pressure resulting from the crisis in the Middle East, which has driven global investors away from riskier assets.

Abdullahi assured that the CBN is diligently monitoring developments in the market and is ready to take necessary actions to prevent sharp fluctuations in the currency.

"The bank is equipped to intervene and alleviate market pressures as much as possible," he stated.

Since the conflict began on February 28, the naira has depreciated approximately 1.3 percent against the US dollar, reflecting the cautious sentiment among global investors who have been withdrawing from emerging- market investments in light of increased geopolitical risks.

Despite this decline, the naira has exhibited relative stability when compared to other major African currencies.

According to data from Bloomberg, while the naira has slightly dipped, the South African rand has experienced a 5 percent decrease, and the Egyptian pound has dropped by about 8.5 percent in the same timeframe.

Over the last three months, the naira has shown the least volatility among these currencies, indicating a level of resilience amid ongoing global economic challenges.