Naira Holds at ₦2,200/£ Despite Weakened British Pound Amid UK Economic Concerns

Despite the British pound entering a correction phase globally, the Nigerian naira has remained stable at ₦2,200/£ on the parallel market. The naira’s resistance to movement is notable considering the pound’s recent decline, driven by investor concerns over the United Kingdom’s fiscal policies and political tensions. This stagnation signals ongoing consolidation in Nigeria’s foreign exchange market.

The UK remains Nigeria’s largest diaspora host outside Africa and a key trade partner. The British government recently reaffirmed its commitment to Nigeria through its Developing Countries Trading Scheme (DCTS), which maintains duty-free access for 99% of Nigerian exports. This effort aims to deepen trade ties, ease market entry for Nigerian businesses, and drive economic growth.

UK High Commissioner Dr. Montgomery praised Nigeria’s ongoing economic reforms, especially those improving fiscal stability and investor confidence. He noted the rise in foreign reserves and revenue improvements as indicators of a more stable economic landscape. The UK and Nigeria are pushing for greater bilateral trade, already worth £7.2 billion.

Meanwhile, political developments in Britain added pressure to the pound. Chancellor Rachel Reeves appeared visibly emotional in Parliament following internal disputes over welfare reforms. Prime Minister Keir Starmer’s vague stance on her future sparked further speculation, leading to a dip in the pound and a fall in government bond prices, undermining market confidence.

Elsewhere in global markets, the dollar fluctuated due to U.S. labor data and a new trade agreement with Vietnam, while the euro and yen showed slight movements. Investors are watching closely for further developments ahead of key economic reports in the United States. Despite global currency shifts, Nigeria’s naira remains unexpectedly unaffected in the parallel market.

Source: Nairametrics