The naira settled at N2,205/£ against the British pound sterling on the informal market on Sunday.
The Nigerian unofficial FX band has remained between N2,000 and N2,400 to the pound, driven by sustained offshore demand for sterling amid global volatility. Currency traders believe that the direction of the naira depends on foreign capital sentiment.
The Nigerian naira closed at N2,110/£1 in the last trading session at official market down from N2,095/£1 to N2,090/£1 against the British pound. The Nigerian Foreign Exchange Market (NFEM) reported intraday fluctuations between N1,529.75/$1- N1,535/$1.
Price action showed the GBP/NGN pair still posted a positive breakout following the announcement of the fifth rate drop this year by the Bank of England.
Currency traders in Nigeria haven’t been able to demonstrate much for continuation over the N2000/£, which is still a significant way point.
The naira’s relative stability in August indicated market confidence. Market experts projected that sustained investment confidence in the Nigerian economy and steady policy support are necessary to maintain this momentum. President Tinubu’s decision to float the naira and harmonize multiple rates not only rewrote the monetary rulebook but also improved real-sector sentiment:
Abdul Samad Rabiu states the reforms eased import cost pressure and leveled the playing field. Although inflation and living costs continue to fluctuate, the exchange market is no longer a politically rationed obstacle.
Recent figures from the Central Bank of Nigeria show that the United Kingdom accounts for 50% of remittances by Nigerians in the diaspora in 2024.
Meanwhile, the CBN stated that the naira has one of the best security features globally, citing advanced security measures, and urged citizens to maintain the currency’s integrity in transactions.
The apex bank affirmed the naira’s quality to enhance financial awareness and reinforce confidence in naira banknotes.
Paul Onuoha, a senior official from the bank’s currency operations department, led an interactive session on detecting counterfeit notes and explained the security features embedded in the naira. “Naira is one of the strongest currencies in the world when it comes to security features,”
Onuoha said, demonstrating techniques for spotting fake notes.
The pound continued to outperform its major peers, as the UK’s growth data exceeded expectations. Sterling gained 0.1 percent to $1.359.
This was the highest level since July 10 before the gain was erased. The UK currency strengthened against its Group-of-10 counterparts in the last week and is poised to gain against the euro for the sixth time in a row, its longest winning run in three months.
The rally has occurred as traders are becoming less confident that the Bank of England will lower interest rates further after its bold decision to lower borrowing costs last week. After a 75 percent chance earlier this week, money markets are now pricing a 60 percent chance of another quarter-point cut by year-end.
The British economy performed better than anticipated in the second quarter, according to data, which further supported sentiment and caused currency options markets to move in favor of sterling.
The British economy performed better than anticipated in the second quarter, according to data, which further supported sentiment and caused currency options markets to move in favor of sterling.
However, one-month sentiment has for the first time become neutral, and traders are now optimistic about the pound’s performance against the dollar over the coming week.
The most recent US data, which was made public earlier Friday, provided limited insight into the state of the economy. Although it was in line with expectations, retail sales increased by 0.5 percent in July, which was less than the 0.9 percent gain in June.
Although it was still below the previous reading of 57.7, the Consumer Expectations Index rose marginally to 57.2, surpassing the 56.5 forecast mark
The headline’s mellow reading raised more questions about how resilient consumer demand is. The US Dollar Index (DXY), which measures the US dollar’s strength against six major currencies, is currently trading at 97.80, close to two-week lows, as markets cautiously process the data.
Traders continue to assign high odds, but a slight reversal in Federal Reserve (Fed) rate cut expectations may limit further declines in the haven currency