The Nigerian naira strengthened against the British pound, trading at N1,825/£1 as of April 14, according to the Central Bank of Nigeria (CBN), reflecting renewed resilience in the local currency.
Recent gains by the naira are attributed to improved foreign exchange liquidity, stronger crude oil earnings, policy adjustments by the CBN, and a moderation in dollar demand pressures. These factors have collectively supported the currency’s rebound against major global currencies, including the pound sterling.
The naira has recovered from early April lows of about N1,870/£1, appreciating by roughly 1 per cent over the past two weeks. Analysts say this points to a consolidation phase, with the GBP/NGN pair showing signs of stabilisation.
Technically, the pair is approaching a key psychological support level at N1,800/£1, near its historical low of N1,799/£1. A sustained break below this threshold could signal further strengthening of the naira. On the upside, resistance is seen around N1,854/£1, with a potential move toward N1,900/£1 if bullish momentum returns.
On a year-to-date basis, the naira has gained approximately 7.3 per cent against the pound. Market data indicates that the GBP/NGN pair remains in a neutral-to-bearish consolidation phase after peaking at N1,853.9/£1 on April 7.
Despite the improvement, the naira remains in an early phase of price discovery following ongoing foreign exchange liberalisation by the CBN. Challenges persist, including weak foreign portfolio investment inflows, elevated domestic inflation, and a lingering FX backlog.
The narrowing gap between official and parallel market rates has also coincided with reduced oil output from the Organization of the Petroleum Exporting Countries and the continued strength of the US dollar, factors that still weigh on the currency outlook.
Meanwhile, the pound faces its own headwinds. The Bank of England has maintained its benchmark interest rate at 3.75 per cent, adopting a cautious “wait-and-see” approach amid persistent energy-driven inflation pressures.
Sterling also lost momentum against the US dollar midweek, ending a seven-day rally to trade around $1.356 during London sessions. The pullback came as the greenback strengthened despite easing demand for safe-haven assets, supported by growing optimism over possible diplomatic progress in Middle East tensions.
Geopolitical developments continue to influence market sentiment. The White House is reportedly preparing for a second round of negotiations with Iran, following initial talks that showed signs of progress. US Vice President JD Vance indicated that follow-up discussions could take place soon, while President Donald Trump suggested talks may resume this week, even as disagreements persist over Iran’s nuclear programme.
On the data front, softer-than-expected US Producer Price Index (PPI) figures reinforced expectations that the Federal Reserve may hold off on further rate hikes. Core PPI rose by 0.1 per cent month-on-month, below the 0.6 per cent forecast, while headline PPI increased by 0.5 per cent, also under expectations.
Although annual PPI rose to 4 per cent in March, market participants remain focused on easing inflationary pressures. In the UK, yields on 10-year government bonds declined toward 4.7 per cent as falling oil prices—linked to renewed US-Iran talks—helped temper inflation concerns.
However, markets are now pricing in nearly two potential rate hikes by the Bank of England before the end of 2026, driven largely by recent spikes in global energy prices.
