The naira has strengthened further against the British pound, closing at ₦1,814 to the pound at the official foreign exchange market as improved liquidity continues to support the local currency.
The latest appreciation represents one of the naira’s strongest performances against sterling in July and reinforces the recent trend of relative stability in the foreign exchange market.
The local currency has gained significant ground against the pound compared with its position at the end of 2025, when the exchange rate hovered around ₦1,950 to the pound.
The naira-pound exchange rate has, in recent weeks, traded within a relatively narrow band of approximately ₦1,810 to ₦1,830, reflecting reduced volatility in the market.
The improved performance of the naira has been linked to foreign exchange market reforms implemented by the Central Bank of Nigeria (CBN), efforts to clear outstanding FX obligations and measures aimed at improving transparency in the foreign exchange market.
The reforms have also helped narrow the gap between the official and parallel markets, reducing opportunities for arbitrage while improving confidence in the formal FX market.
The CBN’s tight monetary policy stance has equally provided support for the naira. The high-interest-rate environment is designed to moderate inflationary pressures and make naira-denominated assets more attractive to investors.
Rising foreign exchange inflows and improved liquidity have also helped reduce pressure on the currency, while stronger external reserves provide additional capacity to support stability in the FX market.
The naira’s appreciation against the pound could provide some relief to Nigerians and businesses with financial commitments denominated in sterling. Students paying tuition and other expenses in the United Kingdom, families supporting relatives abroad and importers sourcing goods from the UK could benefit from a stronger naira if the trend is sustained.
However, the impact on the broader economy will depend largely on whether the currency’s gains are sustained over time. Persistent demand for foreign exchange from importers, manufacturers and other businesses could still place pressure on the naira.
Nigeria’s FX market also remains vulnerable to fluctuations in crude oil prices, oil production levels, and foreign capital inflows, which are key sources of foreign exchange earnings for the country.
Meanwhile, developments in the United Kingdom will continue to influence the pound’s value. Expectations surrounding interest-rate decisions by the Bank of England, inflation, economic growth and wage trends could affect the naira-pound exchange rate in the coming weeks.
For now, the naira’s latest rebound against sterling offers another indication of improved conditions in Nigeria’s foreign exchange market, although analysts are expected to remain cautious about the sustainability of the gains amid persistent structural demand for foreign currency.
The performance of the naira in the coming months will largely depend on the CBN’s monetary and FX policies, the strength of foreign exchange inflows and the country’s ability to maintain adequate external reserves.
