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By Chinwendu Obienyi
For the first time in 20 years, the Euro fell against the US dollar on Tuesday, edging closer to parity with the US currency.
This was even the oil prices posted another sharp intraday decline with COVID-19 resurgence in China adding to concerns about another global economic slowdown.
By 10:20 GMT, the Euro was down 0.2 per cent at a low of $1.00, while traders who spoke to Daily Sun via telephone said the Euro traded N620/€1 at the parallel market.
The currency has been significantly weakened by high inflation and Europe’s energy crisis due to the war in Ukraine.
Investigations reveal that crude had tumbled since early June on escalating fears the US may be heading for a recession as central banks hike rates aggressively to combat inflation.
Russia supplied nearly 40 per cent of Europe’s gas before the war with Ukraine, and the bloc has since attempted to reduce dependence on fuel from the country.
Reacting to the development, the Vice Chairman, Board of Directors at Highcap Securities, David Adonri, noted that this is to Nigeria’s advantage due to the fact that it imports its refined products from Europe.
“Few months ago I tried to change Euro into Naira and it was more than 20 per cent higher than the dollar and with this happening, it means that the economic crisis in the European Union is much more severe in the U.S. You know that the inflation rate in the U.S has been galloping and the prediction was that the economy will go into recession but the unemployment and growth figures has dispelled those predictions.
For us in Nigeria, this can be interpreted as an advantage which means that anything we are importing from Europe will come to us cheaper. You know we import our fuel refined products from Europe and being a large trading partner in Nigeria and so if their state of their economy is diminishing, that could affect their imports from Nigeria”, Adonri explained.
