Naira Strengthens Against British Pound, Settles at N1,814/£ in Strongest July Performance

The Nigerian naira recorded a sharp appreciation against the British pound sterling on Monday, strengthening to N1,814 per pound at the official foreign exchange market, its strongest performance against the UK currency so far in July.

The latest exchange rate reflects the continued recovery of the local currency, which has sustained notable gains against the pound throughout 2026 after trading near N1,950/£ at the close of last year.

Market data indicate that the naira has returned to levels last seen in mid-July before experiencing renewed upward momentum. The currency pair is currently trading within the relatively stable N1,810/£ to N1,830/£ range, suggesting improved market confidence and reduced volatility.

Analysts attribute the naira’s improved performance to ongoing reforms in Nigeria’s foreign exchange market and the Central Bank of Nigeria’s sustained efforts to enhance liquidity. The apex bank’s aggressive clearance of outstanding foreign exchange obligations has significantly reduced arbitrage opportunities between the official and parallel markets, helping to stabilize exchange rates.

The Central Bank of Nigeria has also maintained a tight monetary policy stance aimed at curbing inflation, supporting the value of the naira, and attracting foreign portfolio investment into naira-denominated financial assets through elevated interest rates.

In addition, the CBN’s periodic interventions in the foreign exchange market have boosted dollar liquidity, eased pressure from unmet foreign exchange demand, and reduced the accumulation of payment backlogs across various sectors of the economy.

These measures have continued to narrow the exchange rate gap between the official and parallel markets, strengthening investor confidence in the country’s foreign exchange management framework.

Despite the recent appreciation, analysts note that structural demand for foreign exchange remains strong, driven by Nigeria’s import requirements, external debt servicing obligations, and international trade transactions. These factors are expected to continue influencing movements in the naira-pound exchange rate over the medium to long term.

Nigeria’s foreign exchange position has also received support from improved crude oil production, relatively firm international oil prices, and stronger external inflows, all of which have contributed to healthier foreign reserve levels and increased liquidity in the foreign exchange market.

Developments in the United Kingdom are also influencing the currency pair. The Bank of England has maintained its benchmark interest rate at 3.75 percent, reflecting caution over persistent inflationary pressures, particularly in the services sector, and continued wage growth.

The relatively high UK interest rate has helped preserve the pound’s strength against many major global currencies, limiting the scope for significant sterling weakness.

However, economists observe that Britain’s modest economic growth, estimated at between 1.0 and 1.2 percent annually, alongside fiscal constraints and subdued investment activity, could weigh on the pound’s longer-term outlook. At the same time, any renewed inflationary pressures in the UK could alter the Bank of England’s policy path and influence future movements in the sterling-naira exchange rate.

For now, the naira’s rebound to N1,814 per pound underscores the impact of Nigeria’s ongoing foreign exchange reforms and monetary tightening, reinforcing expectations that improved market liquidity and sustained policy interventions could continue to support exchange rate stability in the months ahead.