Naira Stays Firm Below ₦2,200/£ as Global Pound Strength Faces Local Resistance

The Nigerian naira held firm against the British pound in the unofficial market, closing at around ₦2,177/£ as of April 29, 2025. Despite consistent buying pressure on the pound globally, the naira managed to stay below the ₦2,200 mark through most of April. Analysts suggest that the currency is in a consolidation phase, with the ₦2,100–₦2,180 range acting as a buffer, even as investors react to foreign exchange shifts and the broader global financial climate.

The dynamics between Nigeria and the UK remain pivotal, particularly with the UK being the country’s second-largest trading partner and accounting for half of all Nigerian remittances. The Central Bank of Nigeria anticipates a 9% increase in remittances to $21 billion for 2024, further reinforcing the pound’s influence on Nigeria’s forex market. Additionally, the UK continues to attract a large number of young Nigerians, driven by common language, time zone alignment, and easier accessibility compared to North America.

On a global level, UBS revised its outlook on the pound, projecting the GBP/USD rate to hit 1.39 by March 2026. This forecast stems from a softer U.S. dollar and improved UK trade prospects, especially after being largely spared from Trump-era tariff hikes. Though the pound hasn’t achieved safe-haven status, it’s showing resilience similar to one, making it attractive for carry trade investors. Still, UBS warns of vulnerabilities tied to the UK’s trade-heavy economy if global demand slows.

Elsewhere, the U.S. dollar continues to face pressure from geopolitical uncertainties, especially amid slow-moving U.S.–China trade negotiations. The dollar index remains subdued as markets await major U.S. economic indicators later in the week. With the euro and pound gaining ground and investors hedging in favor of European currencies, Nigeria’s forex markets are likely to feel the ripple effects in the coming months.

Source: Nairametrics