Naira Gains Against British Pound

The Nigerian naira strengthened against the British pound sterling on the foreign exchange market despite renewed gains recorded by the pound in the global currency market.

Latest data from the Central Bank of Nigeria showed the pound trading at N1,856/£1.

The development reflects improved liquidity conditions in Nigeria’s foreign exchange market and sustained intervention measures by the apex bank.

Market activity showed that movements in the GBP/NGN exchange rate continued to be influenced largely by domestic dollar liquidity conditions rather than direct real-time alignment with global foreign exchange pricing.

The pound appreciated against the United States dollar in international markets, but the naira’s recovery in the domestic market limited the impact on the local exchange rate.

The CBN’s recent policy measures, including market interventions and the revised Foreign Exchange Manual, contributed to improved trading activity and liquidity across the market.

Average daily foreign exchange turnover increased significantly from previous levels of around $100 million to between $400 million and $600 million, with volumes occasionally exceeding $1 billion.

The naira also recovered from weaker levels recorded in April and maintained relative stability through the first half of May.

At the same time, the pound faced pressure amid political developments in the United Kingdom.

CBN data showed that the naira traded near N1,850/£1 by mid-May after weakening to about N1,883/£1 earlier in the month.

The recovery reflected both improved domestic liquidity management and temporary weakness in the British currency.

The Bank of England maintained a cautious monetary policy stance amid persistent wage pressures and resilient service-sector activity in the UK economy.

Higher interest rates in the UK continued to support investor appetite for pound-denominated assets, helping preserve the currency’s global strength.

Market trends indicated that the GBP/NGN exchange rate was stabilising within the N1,830 to N1,860 range as both currencies adjusted to prevailing market conditions.

The pound traded around 1.348 against the US dollar during the midweek London trading session, reflecting continued strength against the greenback.

Global currency markets were also influenced by geopolitical tensions following renewed United States attacks on Iran.

Iran’s Foreign Ministry condemned the attacks, describing them as a violation of the ceasefire arrangement that had remained in place since early April.

The Islamic Revolutionary Guard Corps also threatened retaliation, increasing geopolitical uncertainty across global markets.

The development supported demand for the safe-haven US dollar and reinforced expectations that the US Federal Reserve could maintain a hawkish monetary policy stance.

Despite the tensions, investors remained cautiously optimistic over diplomatic discussions between the United States and Iran, easing concerns over major disruptions to global energy supply.

Declining crude oil prices and moderating inflation expectations also supported gains recorded by the British pound in international markets.

However, weaker UK inflation data moderated expectations of additional interest rate tightening by the Bank of England.

United Kingdom consumer inflation slowed unexpectedly to 2.8 per cent year-on-year in April from 3.3 per cent in the previous month.

The development reduced expectations of another near-term rate increase and limited stronger bullish momentum for the pound sterling in the global foreign exchange market.