…as Asian market sustains resilence
African currencies have depreciated by 3.2% following a renewed wave of pressure following a sharp escalation in geopolitical tensions involving the United States, Israel, and Iran.
According to a report by the United Nations Conference on Trade and Development (UNCTAD), titled “Trade and Development Foresights 2026: Global economy faces a geopolitical challenge,” conflict-driven shocks severely disrupted global capital distribution, eroded investor confidence, and sparked intense volatility across developing regions.
UNCTAD observed that while many emerging and frontier market currencies had previously logged notable gains, those upward trends quickly reversed as global risk aversion mounted.
The report indicated that African markets suffered some of the most severe setbacks worldwide as global asset managers minimized risk exposure.
Specifically, African currencies dropped by 3.2% after initially achieving an 8.7% appreciation before the conflict escalated.
Similarly, broader emerging markets saw a 1.3% decline, reversing a previous 5.9% gain, while frontier economies slipped by 0.7% following an earlier 3.3% climb.
Regionally, the Americas witnessed the steepest post-conflict drop among developing regions, declining 3.6% after a previous 16.6% surge.
On the other hand, Asian markets proved more resilient, managing a 2.0% turnaround after an initial 0.8% dip.
According to UNCTAD, the varied impact across these regions can be tied to local foreign exchange regimes, debt sustainability indicators, previous capital inflows, and the volume of foreign participation in local financial markets.
The document highlighted the structural exposure of African nations to external economic disruptions, especially for countries heavily dependent on foreign portfolio investments, external borrowing, and imported goods.
The geopolitical uncertainty has not only fueled global energy prices and domestic inflation but has also raised concerns over capital flight and rising debt service obligations.
Despite these global headwinds, Nigeria’s naira showcased notable resilience in the official foreign exchange market. Central Bank of Nigeria (CBN) data revealed that the currency strengthened to N1,363.5 per dollar toward the close of the review period, recovering from N1,425 recorded earlier in the week.
Economic analysts trace the naira’s relative stability during this global storm to improved local foreign exchange liquidity, stronger oil revenues, and ongoing monetary policy adjustments aimed at sustaining investor confidence.
As central banks across Africa continue to implement aggressive reforms to anchor inflation and stabilize exchange rates, global financial markets remain highly sensitive to further updates out of the Middle East, particularly regarding energy supply lines and oil price fluctuations.