The naira recorded a mild decline against the British pound at the opening trading session of the week, closing at N1,885.8/£1 in the Nigerian foreign exchange market on Monday.
The local currency has largely traded within the N1,825–N1,950/£1 range in recent weeks amid evolving economic conditions in the United Kingdom and ongoing liquidity management measures by the Central Bank of Nigeria.
Analysts attributed the latest movement partly to market reactions to the Bank of England interest rate outlook and global risk sentiment.
Nigeria’s benchmark monetary policy rate remains elevated at 26.5%, a factor analysts say continues to support foreign portfolio inflows and limit sharper depreciation of the naira through carry-trade activities.
Currency dealers also noted that the CBN’s efforts to narrow the gap between the official Nigerian Foreign Exchange Market (NAFEM) and the parallel market have helped moderate volatility in the currency market.
Market participants are closely monitoring UK inflation data, as persistently high inflation could push the Bank of England to maintain elevated interest rates, a development that may further strengthen the pound.
Technical indicators showed the GBP/NGN pair remained largely neutral, with traders watching the N1,850/£1 support level and possible resistance around N1,900/£1.
Meanwhile, the British pound also came under pressure against the U.S. dollar as investors shifted toward safe-haven assets following renewed geopolitical tensions involving Iran and the United States.
The U.S. dollar gained support after reports that U.S. President Donald Trump rejected Iran’s peace proposal, reviving global risk-off sentiment in financial markets.
Attention has also shifted to upcoming U.S. inflation and labour market data, particularly the Nonfarm Payrolls report, which investors believe could shape expectations for future interest rate decisions by the U.S. Federal Reserve.
In the UK, Prime Minister Keir Starmer is reportedly facing increasing political pressure following recent electoral setbacks suffered by the ruling Labour Party.
Analysts said political uncertainty in the UK, combined with rising gilt yields and persistent inflation concerns, may continue to influence the direction of the pound in the near term.
