Middle East Escalation Triggers FPI Outflows, Driving Naira to N1,425 per Dollar
The ongoing geopolitical tensions in the Middle East, marked by escalating conflicts involving the United States, Israel, and Iran, are rippling through global financial markets and exerting significant pressure on Nigeria's economy. As oil prices surge amid fears of supply disruptions, Nigeria stands to gain from higher export revenues, yet this potential windfall is overshadowed by rising inflation risks and a flight of foreign portfolio investors (FPIs) seeking safer havens. The result has been a sharp depreciation of the Naira, which recently weakened to N1,425 per US dollar in the parallel market, highlighting the vulnerability of emerging economies to global shocks. The conflict intensified in early March 2026 with US and Israeli strikes on Iranian targets, fueling concerns over prolonged instability in a region critical to global energy supplies. Oil prices have climbed by 8-10% as a result, driven by potential disruptions to shipping routes and energy infrastructure. While ...