The Nigerian naira has weakened further against the British pound, trading at an average of N1,896/£, even as the UK currency faces mounting pressure in the global foreign exchange market.
Latest figures from the Central Bank of Nigeria (CBN) indicate that the naira continues to trade within the N1,825 to N1,950 per pound range, reflecting ongoing volatility in the currency market.
Analysts say the naira’s performance is being shaped by a mix of domestic policy measures and external factors. The CBN’s decision to retain the Monetary Policy Rate at 26.5 per cent has helped sustain investor interest in naira-denominated assets, creating what market watchers describe as a “carry trade” buffer that slows sharper depreciation.
At the same time, government interventions in key sectors—such as efforts to stabilise aviation fuel prices—have helped ease immediate inflationary pressures, particularly in transportation, though they continue to weigh on public finances.
Despite these measures, the naira remains under pressure, especially during periods of increased demand for foreign exchange, such as month-end obligations by businesses and importers.
Market indicators suggest mixed signals. While short-term trends point to mild bearish pressure on the naira against the pound, longer-term patterns still show the British currency maintaining a significant value gap.
Globally, the British pound itself has struggled, slipping against the US dollar and hovering around the $1.35 mark in midweek trading. The currency has been weighed down by heightened geopolitical tensions and investor caution.
Rising uncertainty linked to tensions in the Middle East has pushed investors toward safer assets, strengthening the US dollar while weakening higher-risk currencies like the pound.
Domestic political developments in the UK are also adding to the pressure. Investors are closely watching upcoming local elections and political debates, with concerns that shifting voter sentiment could influence fiscal policy and economic direction.
The Bank of England (BoE) is widely expected to hold interest rates steady, mirroring the stance of the Federal Reserve. However, policymakers remain cautious as inflationary pressures persist in the UK economy.
BoE Chief Economist Huw Pill recently signalled the need for tighter monetary conditions, highlighting ongoing concerns about rising prices.
Looking ahead, analysts note that both the naira and the pound could face additional pressure if global risks escalate further, particularly if geopolitical tensions intensify and drive stronger demand for the US dollar.
For now, the naira’s outlook remains fragile, supported by policy interventions at home but still vulnerable to external shocks and persistent demand for foreign exchange.
