The Nigerian Naira opened Friday’s trading session at N1,834 per British Pound, reflecting continued fluctuations in the foreign exchange market as the British currency lost ground against the US dollar. Throughout the month, the Pound has traded within a range of N1,813 to N1,862, highlighting persistent volatility that has kept traders focused on the N1,830 level as a key price zone.
Demand for the British Pound remains strong among Nigerians, largely driven by increasing medical trips to the United Kingdom and the payment of tuition fees for students studying in British schools. Despite the sustained demand, the Central Bank of Nigeria (CBN) has maintained high interest rates in an effort to curb inflation and stabilize the local currency. Rising foreign exchange reserves have also strengthened the apex bank’s ability to intervene in the market and reduce excessive volatility.
Currency analysts believe that if the Pound moves decisively above the N1,840 mark, buying momentum could strengthen further, with the exchange rate potentially testing the previous monthly high near N1,850 per Pound. Traders are also monitoring month-end foreign exchange liquidity from authorized dealers and Bureau De Change (BDC) operators, as corporate settlements and international payments typically increase demand during this period.
On the global stage, the British Pound came under pressure as investors shifted toward the US dollar following rising geopolitical tensions in the Middle East and stronger demand for safe-haven assets. Although the Bank of England is widely expected to keep its benchmark interest rate unchanged at 3.75%, the Pound continues to receive support from relatively attractive UK bond yields and easing inflation, which has reduced expectations of further rate hikes.
Meanwhile, developments in the United States have added another layer of uncertainty to the currency market. Softer economic growth, easing inflation, and a decline in the Personal Consumption Expenditures (PCE) Index have lowered expectations of an immediate Federal Reserve interest rate increase. With central bank decisions, geopolitical events, and domestic foreign exchange demand all influencing market sentiment, investors are expected to closely watch both local and international developments for clues on the next direction of the Naira to British Pound exchange rate.
source: nairametrics
