Pound holds at N1,837 as Naira stability faces global currency pressure

On the last trading day of the week, the British Pound exchanged hands at N1,837/$1 against the Nigerian Naira on the Nigerian foreign exchange market. The Forex market data showed a slight uptick in GBP/NGN trading, with highs of N1,805/$1 and lows of N1,875/$1 over the last 30 days. Meanwhile, the US dollar/Naira rate hovered around N1,360/$.

Nigeria's currency has remained relatively stable in recent months, growing on an average annual basis compared to past years when it was subject to extreme volatility, with historic highs reaching over N1,900/$ during 2024. The Central Bank of Nigeria (CBN) implemented new foreign exchange market rules aimed at boosting liquidity, increasing transparency, and aligning with international best practices.

Nigeria's foreign exchange reserves stand at approximately $53 billion, providing a mid-term boost to the naira. The Nigerian foreign exchange market's daily trading turnover has surged significantly, now regularly exceeding $400 million, with some days recording a staggering $1 billion. The CBN has maintained a hawkish stance, with the Monetary Policy Rate (MPR) set at 26.5% to curb liquidity and control the naira's circulation.

As a result, inflation trends in Nigeria seem to be decelerating or holding steady, averaging around 15.9% due to tight monetary policy and improved food output figures during harvest seasons. The fiscal pressures that once weighed heavily on the currency have now been somewhat alleviated, thanks to consistent increases in oil output and solid trade surpluses.

International credit rating agencies, such as Moody's, have recognized Nigeria's structural adjustment efforts, as evidenced by the upgrade of Nigeria's sovereign rating to B3 due to improved transparency and debt management. The British Pound pushed higher, closing in on 1.3495 against the US dollar in early European trading on Friday.

As the cooler-than-expected US Consumer and Producer Price indices narrow the scope for further interest rate hikes by the Federal Reserve, all eyes are on the US retail sales report for July. July's wholesale costs of goods and services remained flat against expectations for a 0.2% rise and down from a 0.1% decline in June, according to the Bureau of Labor Statistics report released on Thursday.

The UK economy grew by 0.4 percent quarter-over-quarter in the second quarter of 2026, a slight slowdown from the previous quarter's 0.6% growth, as reported by the Office for National Statistics (ONS) on Thursday. This latest update aligns with market analysts' expectations, leading Bank of England Governor Mr. Huw Pill to suggest that it supports arguments for extending the current cycle of interest rate increases.