The Nigerian naira recorded a notable gain against the British pound, trading around N1,825/£1, as uncertainty in the United Kingdom’s political and economic landscape weighed heavily on the sterling. The movement reflects shifting sentiment in global forex markets, where investors continue to react to both domestic reforms in Nigeria and external pressures from advanced economies.
Earlier in the year, the naira had started at roughly N1,949/£1, meaning it has strengthened by about 7% year-to-date against the pound. This steady appreciation signals improved investor confidence and relatively stronger FX liquidity in Nigeria’s official market, despite ongoing volatility in global currency trading.
In parallel, the pound also experienced weakness in the parallel market, trading around N1,880/£1, driven by strong demand for foreign currency from importers, travelers, and students. Meanwhile, the naira-dollar exchange rate remained under pressure in the black market, reflecting persistent FX demand even as official windows show relative stability.
Market analysts point to a combination of factors supporting the naira’s resilience, including sustained interventions by the Central Bank of Nigeria, a tight monetary policy stance with the MPR at 26.5%, and improved FX inflows from crude oil exports and diaspora remittances. The clearance of FX backlog obligations has also helped attract renewed foreign portfolio investment into Nigerian assets.
On the supply side, Nigeria’s external position has benefited from rising oil production and stronger energy prices, boosting foreign reserves. The increased contribution of local refining—especially from the Dangote Refinery operating at near full capacity—has also reduced pressure on dollar demand for fuel imports, strengthening the country’s FX position.
Globally, the British pound has come under pressure amid political uncertainty in the UK, softer inflation data, and shifting expectations around Bank of England interest rate decisions. At the same time, the US dollar remains strong due to a more hawkish Federal Reserve stance, further weakening GBP performance in global markets.
Geopolitical tensions and shifting energy outlooks have also influenced investor sentiment, with developments in US-Iran relations and Middle East security risks shaping broader risk appetite. Together, these factors continue to drive volatility in forex markets, leaving the naira relatively stronger against the pound in recent trading sessions.
source: nairametrics