The Nigerian naira strengthened against the British pound sterling in the official market, appreciating to N1,858/£1, according to the latest data from the Central Bank of Nigeria.
The gain represents an improvement of N38 from its recent low of N1,896/£1 recorded on April 29, signalling a modest recovery in the local currency against the pound.
Market activity indicates that the naira–pound pair has remained relatively stable in recent sessions, supported by improved foreign exchange liquidity and reduced speculative pressure. The currency traded within a consolidation range, with analysts noting reduced short-term volatility compared to earlier periods.
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Despite the recovery, traders expect potential fluctuations driven by global and domestic factors, including crude oil price movements, central bank interventions, UK monetary policy direction, and broader investor risk appetite.
Analysts say the naira’s recent stability reflects ongoing efforts by the CBN to clear foreign exchange backlogs and tighten monetary conditions, which have helped reduce the sharp volatility seen in previous years. However, the currency remains sensitive to external shocks, particularly shifts in global oil prices.
In the parallel market, the pound was quoted higher at around N1,910/£1, underscoring the persistent gap between official and unofficial exchange rates. Demand for sterling remains elevated, largely driven by overseas education, travel, and precautionary demand by individuals and businesses.
The disparity between official and parallel market rates continues to narrow gradually, supported by policy measures aimed at improving transparency and boosting FX supply.
Meanwhile, developments in the United Kingdom have continued to support the pound. The Bank of England has maintained a relatively hawkish stance, keeping its benchmark interest rate at 3.75% while signalling the possibility of further tightening if inflationary pressures persist.
Governor Andrew Bailey has warned that rates could rise further in response to potential energy price shocks, particularly amid ongoing geopolitical tensions in the Middle East.
The pound has also shown modest strength against the US dollar, trading at about 1.36, supported by resilient UK economic data and expectations of policy tightening.
Analysts note that while the naira has shown resilience in recent weeks, seasonal demand for foreign exchange and global market uncertainties could continue to exert pressure on the currency in the near term.
