The Nigerian naira strengthened against the British pound on Wednesday, extending recent gains as the Central Bank of Nigeria (CBN) maintained a hawkish monetary policy stance aimed at containing inflation and supporting stability in the foreign exchange market.
The pound was quoted at about ₦1,849 per £1, compared with ₦1,855 recorded in the previous trading session, indicating a modest appreciation by the naira against the British currency.
The latest movement comes after the naira had weakened against the pound in mid-July, when the sterling traded around ₦1,855 in the official foreign exchange market.
Market watchers attributed the latest improvement partly to the CBN’s tight liquidity management and its continued emphasis on monetary stability. The apex bank has retained a relatively restrictive policy stance, with the Monetary Policy Rate (MPR) at 26.5%, while maintaining measures designed to mop up excess liquidity from the financial system.
The CBN’s hawkish approach is expected to help moderate demand pressures in the foreign exchange market while supporting investor confidence in the naira.
The currency’s performance against the pound also reflects broader movements in the global foreign exchange market, where the strength of the British currency and developments surrounding the Bank of England’s monetary policy continue to influence the GBP/NGN exchange rate.
The naira has, however, shown relative resilience in recent months, supported by improved foreign exchange liquidity and stronger external reserves. Nigeria’s reserves have risen above $51 billion, providing the CBN with greater capacity to manage market volatility and strengthen confidence in the country’s external position.
Analysts expect the naira’s outlook to remain closely tied to the CBN’s monetary policy direction, foreign exchange liquidity, oil earnings and global currency movements.
While a sustained hawkish stance could continue to support the naira by limiting excess liquidity and speculative demand, external pressures—including movements in the pound and US dollar—could still trigger short-term volatility in the domestic FX market.
The latest appreciation against the pound therefore provides another indication of improved naira stability, although analysts say sustained gains will depend on continued reforms in the FX market, stronger foreign exchange inflows and prudent monetary management.
