The Nigerian Naira maintained its upward trajectory against the British Pound on Thursday, closing at N1,767/£ in the official foreign exchange market. This latest appreciation marks a continued bullish streak for the local currency, which has benefited from improved liquidity and more robust economic indicators over the final quarter of 2026.
Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) indicated that the Naira gained significantly from the previous trading session’s close. Market turnover also saw a notable increase, suggesting a rise in dollar and pound sterling availability as the Central Bank of Nigeria (CBN) continues its strategic interventions in the currency markets. Traders at the NAFEM window reported that the pound traded at an intra-day high of N1,820 before settling at the N1,767 mark by the close of business.
The strengthening of the Naira is being attributed by analysts to a combination of disciplined monetary policy and a steady improvement in Nigeria’s trade balance. Recent figures published by the National Bureau of Statistics (NBS) suggest that the country has maintained a trade surplus, driven largely by sustained oil production levels and an uptick in non-oil exports. This has provided the apex bank with the necessary ammunition to support the local currency against major global peers including the US Dollar and the British Pound.
Investment banks and domestic brokerage firms have noted that the current exchange rate stability is a relief for Nigerian manufacturers and importers. The cost of bringing in raw materials and machinery from the United Kingdom, a key trading partner, has faced immense pressure over the last two years due to currency volatility. This recent streak of appreciation offers a window of predictability for corporate treasury departments planning their import cycles for the holiday season.
Central Bank Interventions and Market Liquidity Drive Appreciation
The primary driver behind the Naira’s recovery appears to be the CBN’s refined approach to market liquidity. Through the Retail Dutch Auction System (RDAS), the apex bank has successfully cleared significant portions of the foreign exchange demand from small and medium-sized enterprises (SMEs) and large conglomerates. By addressing the backlog and current demand in a transparent manner, the bank has reduced the panic-buying that previously drove the Naira to record lows.
Furthermore, the FMDQ Securities Exchange has reported a consistent increase in daily transaction volumes. The convergence between the official and parallel market rates has also discouraged speculative activities, as the margin for arbitrage continues to narrow. Financial experts suggest that as long as the CBN maintains its current hawkish stance on interest rates, the Naira remains an attractive prospect for domestic investors, further supporting its value.
However, the sustainability of this bullish run remains tied to external factors, particularly global energy prices and the monetary policy direction of the Bank of England. While the British Pound has faced its own headwinds due to shifting economic forecasts in Europe, the Naira’s strength is largely seen as a domestic success story resulting from the harmonisation of fiscal and monetary policies. The government’s recent efforts to streamline tax collection and reduce the budget deficit have bolstered investor confidence in the broader economy.
For Nigerian businesses, the current rate of N1,767/£ represents a significant improvement from the N1,900 levels observed earlier in the year. Importers of pharmaceutical products, automotive parts, and refined petroleum products are expected to see a slight reduction in landed costs if this trend holds. This could eventually lead to a cooling effect on headline inflation, which has remained a primary concern for the Nigerian government throughout the year.
Looking forward, market participants are focused on the upcoming meeting of the Monetary Policy Committee (MPC). The committee’s decision on the Monetary Policy Rate (MPR) will be crucial in determining whether the Naira can sustain its gains or if it will face renewed pressure as the year-end demand for foreign travel and imports intensifies. Most analysts expect the CBN to maintain its current policy path, prioritising currency stability over aggressive growth in the short term to ensure that the gains made against the British Pound and other major currencies are not reversed.
The next few weeks will be critical for the NAFEM window as the market tests the N1,750 support level. If the Naira breaks below this mark against the Pound, it could signal a long-term shift in the currency’s valuation, potentially attracting more foreign portfolio investment into the Nigerian debt market.
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