The EUR to NGN exchange rate has recently shown volatility, trading at 1676 NGN, which is 3.0% below its three-month average of 1727 NGN. Analysts have noted a fairly wide trading range of 1656 to 1800 NGN in this period, indicating fluctuations that may be driven by both local and global economic factors.
Current developments signify that the euro's performance remains influenced by the European Central Bank’s (ECB) dovish monetary policy shift, as the ECB is projected to cut interest rates to 3.5% by late 2025 due to slowing economic growth. Such a decline may reduce the interest rate differential with the U.S. dollar, potentially affecting demand for the euro. Additionally, lingering geopolitical tensions from the ongoing war in Ukraine continue to weigh heavily on the euro, impacting investor confidence and contributing to its recent modest gains against the dollar following a dollar weakening.
In Nigeria, recent central bank rate cuts aim to stimulate growth amid easing inflation, which could have a potential stabilizing effect on the Nigerian naira. However, the suspension of naira-denominated petrol sales by Dangote Refinery could increase downward pressure on the naira, complicating the currency outlook. The IMF has highlighted improvements in Nigeria's macroeconomic resilience, but ongoing inflationary pressures remain a concern.
Oil prices, trading at 64.89 USD, have also displayed volatility. Prices are 1.1% below their three-month average, trading in a broad range of 60.96 to 70.13 USD. Since Nigeria's economy is closely tied to oil revenues, fluctuations in oil prices can significantly impact the naira’s value against foreign currencies, including the euro.
Overall, the EUR to NGN exchange rate outlook remains uncertain, with euro values influenced by European economic indicators and policies, while the naira's performance is shaped by domestic monetary policy adjustments and external oil price movements. As the situation evolves, stakeholders should monitor these developments closely to better navigate international transactions.
