The Nigerian naira appreciated against the British pound on Friday, with the sterling trading at N1,834 in the foreign exchange market as the UK currency lost ground against the US dollar amid shifting global market sentiment.
Market data showed the pound traded within a range of N1,813/£ and N1,862/£ during July, reflecting continued volatility in the GBP/NGN exchange rate despite the naira’s recent gains.
Analysts attributed the sustained demand for the British currency in Nigeria to increased school fee remittances to UK institutions and rising medical tourism, which have continued to support demand for pounds.
However, the Central Bank of Nigeria’s tight monetary policy, coupled with regular foreign exchange sales to authorised dealers and Bureau De Change operators, has helped moderate excessive pressure on the naira.
Traders said a move above the N1,840/£ level could trigger fresh buying interest and push the exchange rate towards the month’s previous high of about N1,850/£.
They also noted that month-end corporate settlements and foreign exchange demand could influence market activity in the coming days, with participants watching liquidity supplied by authorised dealers.
In the global market, the British pound remained under pressure against the US dollar, trading around 1.3445 dollars in early European trading. The greenback drew support from rising crude oil prices and heightened geopolitical tensions, while investors awaited the Bank of England’s next monetary policy decision.
Financial markets expect the Bank of England to leave its benchmark interest rate unchanged at 3.75 per cent, as easing inflation in the UK reduces the urgency for further monetary tightening.
The naira’s resilience against the pound also comes amid improving external reserves and relative stability in Nigeria’s foreign exchange market, strengthening confidence in the local currency despite persistent external demand for foreign exchange.
