The naira was relatively stable against the British pound as the Bank of England left the UK’s interest rates unchanged.
The British pound settled at N2035/£ at the official market on Thursday.
Recent price movements show that the Nigerian currency has remained in a consolidation phase in the unofficial market, ranging between N2,200/£ and N2,210/£ this month
The CBN’s decision to float the naira and harmonize multiple rates also improved sentiment in the real sector
Naira may see some bullish momentum in the short term, partly because of improved foreign exchange inflows and a moderation in Nigeria’s inflation readings. Nigeria’s inflation rate dropped for the fifth consecutive month, giving the populace, who have been hit hard by persistently high living costs, some relief.
According to NBS data, Nigeria’s inflation rate fell to 20.12% in August.
Richard Montgomery, the British High Commissioner to Nigeria, announced that trade between Nigeria and Britain has reached an all-time high, currently valued at £7.9 billion (approximately N16 trillion).
Montgomery emphasized that the UK-Nigeria Enhanced Trade and Investment Partnership (ETIP) enhances trade relations by removing non-tariff barriers to trade and investment.
He explained that the ETIP provides favorable trading conditions and tariff reductions for Nigerian goods, which, along with support from the Developing Countries Trading Scheme (DCTS), is expected to increase trade volume.
“I am very pleased with our most recent trade statistics. The trajectory is extremely positive,” he stated.
Montgomery highlighted that Britain has advanced manufacturing capabilities and innovative energy solutions within the creative economy that are relevant and valuable in the Nigerian context. He expressed enthusiasm for the ETIP, describing it as a mutually agreed framework under which the UK and Nigerian governments will collaborate on specific sectors and issues.
The Bank of England has decided to keep interest rates at 4 percent and did not take part in today’s meeting.
This decision was anticipated, following a quarter-point reduction in August, leading to minimal movement in the British pound. In the recent vote, which resulted in a 7-2 split, two members advocated for a quarter-point decrease.
The British Apex bank took an unprecedented two rounds to decide to lower rates, with a narrow 5-4 vote last month. These divided opinions showcase internal disagreements within the Bank of England regarding the future of its monetary policy.
The British central bank is striving to balance the need to ease economic conditions and lower interest rates amid a slowdown in the job market, while simultaneously addressing rising inflation, which supports the case for maintaining current rates.
The Bank of England is expected to maintain rates for now, so the upcoming job report on Tuesday is unlikely to affect this decision; however, it could influence the rate decisions in November.
The Bank of England is expected to maintain rates for now, so the upcoming job report on Tuesday is unlikely to affect this decision; however, it could influence the rate decisions in November.
The US Dollar Index, which gauged the greenback’s strength against a basket of six major currencies, was trading higher at around 97.4 at the last trading session of the week. This increase can be attributed to the Federal Reserve’s anticipated rate cuts and its lack of urgency to lower borrowing costs in the coming months.
The Federal Reserve implemented a quarter-point rate cut, which was expected and marked the first reduction since December 2024. The cooling labor market was identified as the primary reason for this decision, with Fed Chair Powell reiterating his concerns about the situation during his press conference.