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African currencies came under renewed pressure following the escalation of geopolitical tensions involving the United States, Israel, and Iran, with currencies across the continent depreciating by 3.2% as global investors retreated from emerging and frontier markets.

This is according to a new report titled “Trade and Development Foresights 2026: Global economy faces a geopolitical challenge” by the United Nations Conference on Trade and Development (UNCTAD).

The report showed that the outbreak of conflict-related shocks disrupted global capital flows, weakened investor sentiment, and triggered heightened volatility across developing economies between February 27 and March 13, 2026.

UNCTAD noted that many emerging and frontier-market currencies had recorded strong appreciation before the conflict intensified, but the gains reversed sharply as global risk aversion increased.

According to UNCTAD, African currencies were among the worst affected globally as investors reduced exposure to riskier assets following the geopolitical escalation.

The report stated that the Americas recorded the sharpest post-conflict decline among developing regions at 3.6%, after earlier appreciating by 16.6%, while Asia showed greater resilience, recovering from a 0.8% decline to a 2.0% appreciation.

UNCTAD attributed the varying levels of currency depreciation across regions to factors including exchange-rate regimes, debt sustainability concerns, prior capital inflows, and the share of non-resident investors in domestic financial markets.

The report highlighted growing concerns over the vulnerability of African economies to external shocks, especially in countries heavily dependent on imports, foreign portfolio investments, and external borrowing.

Nigeria’s naira also experienced fluctuations during the period, although recent official market data suggested some level of resilience in the foreign exchange market.

According to figures released by the Central Bank of Nigeria (CBN), the naira appreciated to N1,363.5/$ on March 13, 2026, from N1,425/$ recorded on March 9, 2026.

The currency traded at:

Analysts said the relative stability of the naira may have been supported by improved foreign exchange liquidity, stronger oil earnings, and continued efforts by monetary authorities to strengthen investor confidence.

Global financial markets have remained highly sensitive to geopolitical developments in the Middle East, particularly due to concerns over energy supply disruptions and rising oil prices.

Economists also noted that countries with weaker macroeconomic buffers and larger foreign investor participation in local markets experienced sharper currency adjustments.

The recent currency volatility comes as several African central banks continue efforts to stabilise exchange rates and contain inflationary pressures.

The Naira closed the first trading week of May 2026 on a relatively stable note against the United States dollar, settling at N1,364/$ in the official foreign exchange market.

Nairametrics previously reported that the naira closed April 2026 at N1,374/$ compared to N1,387/$ recorded at the end of March, marking the first April gain for the currency since 2024.