Market News
Naira gains against Pound, trades at N1,837 amid CBN reforms
THE naira recorded modest gains against the British pound, strengthening to N1,837/£ at the official market, in a sign of improving stability in Nigeria’s foreign exchange market.
Market data indicates that the local currency has maintained most of its gains in recent weeks, with analysts attributing the performance to ongoing reforms by the Central Bank of Nigeria (CBN).
The naira’s break below the N1,900/£ psychological threshold is seen as a key development, boosting investor confidence and reinforcing a more stable outlook for the currency after months of volatility.
Analysts say recent policy measures, including tighter monetary conditions and improved foreign exchange liquidity, are beginning to yield results. Nigeria’s external reserves have also strengthened, while disinflationary efforts have helped moderate macroeconomic pressures.
The pound, on the other hand, has shown signs of consolidation, trading within a relatively narrow range after earlier volatility. Market indicators suggest that the naira-pound pair remains below its long-term average, pointing to continued support for the domestic currency.
Further supporting the naira, the gap between official and parallel market rates has narrowed significantly, reflecting improved liquidity and reduced speculative pressure in the foreign exchange market.
Economic reforms have also played a role, including reduced reliance on deficit financing and tighter control of money supply, which analysts say have helped curb excess naira liquidity that previously weighed on the currency.
In addition, stronger diaspora remittances and improved capital inflows have boosted foreign exchange availability, contributing to the currency’s relative stability.
However, global factors continue to pose risks. Elevated crude oil prices hovering above $100 per barrel amid geopolitical tensions offer revenue support for Nigeria but also contribute to inflationary pressures globally.
Meanwhile, monetary policy decisions by the Bank of England are expected to influence the pound’s trajectory, with the UK maintaining a relatively tight interest rate stance.
Analysts say while the naira’s recent performance signals cautious optimism, sustained stability will depend on consistent policy implementation, improved FX inflows, and broader macroeconomic stability.
