The Nigerian naira recorded a modest gain against the British Pound Sterling in the official foreign exchange market, signalling short-term resilience despite persistent global and domestic pressures.
Latest data from the Central Bank of Nigeria (CBN) showed the Pound trading at N1,858/£1, reflecting an appreciation of N38 from its recent low of N1,896/£1 recorded on 29 April.
Market analysts say the naira–sterling pair has remained relatively stable in recent sessions, supported by central bank interventions and improved foreign exchange inflows, particularly from crude oil sales. However, they caution that volatility could increase in the near term due to fluctuations in oil prices, shifts in global risk appetite, and monetary policy decisions in the United Kingdom.
Technical indicators suggest the pair is currently consolidating, with upward-trending moving averages but weakening short-term momentum. Analysts note that a failure to break resistance around N1,850/£1 could trigger further naira strength, while a reversal could push the exchange rate back towards the N1,900/£1 level.
The naira’s volatility, which surged in previous years amid speculative pressures, has eased significantly following aggressive backlog clearance and tighter monetary measures by the CBN. Nonetheless, the currency remains vulnerable to external shocks, particularly movements in global oil prices.
In the parallel market, however, pressure persists. Unofficial trading centres across major cities quoted the Pound at around N1,910/£1, highlighting a continued gap between official and informal rates. Demand for sterling remains elevated, driven largely by overseas education, travel needs, and precautionary buying.
Efforts by policymakers to unify exchange rates have narrowed the disparity, though structural demand for foreign currency continues to sustain pressure outside the official window.
Globally, the Pound has maintained relative strength, trading at approximately 1.36 against the US dollar, supported by the hawkish stance of the Bank of England (BoE). The central bank recently held its benchmark interest rate at 3.75%, in line with expectations, while signalling the possibility of further tightening.
BoE Governor Andrew Bailey warned that policymakers could pursue “forceful tightening” if inflationary pressures—particularly from energy price shocks linked to Middle East tensions—persist. UK inflation rose to 3.3% in March 2026, reinforcing expectations that rates could climb towards 4% or higher later in the year.
Geopolitical risks also remain a key factor influencing currency markets. Tensions in the Strait of Hormuz have raised concerns about energy supply disruptions, while US President Donald Trump recently announced plans to escort neutral ships through the region, a move criticised by Iranian officials as a violation of ceasefire arrangements.
Currency traders are now closely watching upcoming US labour market data, with April employment figures expected to show 73,000 new jobs and an unemployment rate of 4.3%. Any signs of weakness could influence the dollar–pound exchange rate and, by extension, emerging market currencies such as the naira.
Despite global uncertainties, the naira has shown signs of stability, supported by improved liquidity conditions. However, analysts warn that seasonal increases in foreign currency demand later in the year could renew pressure on the local currency.
Market participants are to monitor official closing rates and trading volumes published by FMDQ for clearer direction in the coming sessions.
Boluwatife Enome
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