US Strikes in Nigeria's Sokoto Prompt Naira Weakness and Eurobond Yield Rise
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The United States conducted airstrikes against Islamic State affiliates in Sokoto state, northwestern Nigeria, on December 25 at the request of Nigerian authorities, US Africa Command confirmed. Nigeria's Foreign Ministry described the operation as joint counter-terrorism cooperation, with Foreign Minister Yusuf Tuggar stating President Bola Tinubu approved the action.
Nigerian Eurobond yields widened by 15 basis points post-announcement, with spreads over US Treasuries reflecting increased sovereign risk. The naira traded around 1,455 per dollar on the official market amid ongoing foreign exchange liquidity constraints. Inflation reached 34.8% in December, with the Central Bank of Nigeria maintaining its 27.5% benchmark rate.
Brent crude closed above $63 per barrel following the strikes as traders priced in geopolitical risk. Approximately 20 million barrels of Nigerian crude scheduled for December and January loading remained unsold due to global oversupply and Middle Eastern competition.
Dangote Refinery underwent technical maintenance, halting petrol output and increasing import reliance amid crude supply constraints.
