Naira Strengthens to N1,833/£1 as CBN Policies and FX Reserves Support Stability in Nigeria FX Market

The Nigerian naira has continued its steady performance against the British Pound Sterling, trading at around N1,833/£1 in the latest foreign exchange activity recorded by the Central Bank of Nigeria (CBN). This comes even as the pound shows resilience in global markets, highlighting a rare moment of relative strength for the local currency.

Market data shows that the naira had earlier hit its strongest level of the year at about N1,814/£1, reflecting sustained support in Nigeria’s FX environment. Analysts note that the local currency’s performance is being driven more by domestic dollar liquidity conditions than direct global pound movements, creating a unique pricing pattern in the GBP/NGN exchange rate.

Behind the stability are aggressive monetary measures from the CBN, including a Monetary Policy Rate (MPR) of 26.5% and a Cash Reserve Requirement (CRR) of 45%, both aimed at tightening liquidity and controlling inflation. Nigeria’s external reserves, now close to $49.3 billion, also provide a buffer that helps the apex bank manage volatility in the foreign exchange market.

Oil prices hovering around $100 per barrel have further strengthened Nigeria’s foreign exchange inflows, supporting the naira’s resilience. However, economists warn that structural challenges such as inflationary pressure and uneven productivity still weigh on long-term currency stability, even as high interest rates continue to attract short-term investment inflows.

Meanwhile, the British Pound has remained relatively stable against the US dollar, trading around $1.3460, as global investors react to mixed economic signals from the US and UK. While easing inflation data in the US and cautious central bank policies have improved sentiment, uncertainty around geopolitical tensions and energy prices continues to shape expectations for both the Federal Reserve and the Bank of England.

source: nairametrics