May 15, (THEWILL) — The Nigerian naira strengthened against the British pound in the first half of May, trading around N1,853/£1 in the foreign exchange market, as political uncertainty in the United Kingdom continued to pressure the pound sterling.
Data from the Central Bank of Nigeria (CBN) showed the naira appreciated from N1,882.9/£1 recorded earlier in the week, reflecting improved stability in Nigeria’s foreign exchange market despite persistent global economic concerns.
The pound came under renewed pressure after political tensions escalated within the UK’s ruling Labour Party.
Manchester Mayor Andy Burnham reportedly signaled interest in challenging Prime Minister Keir Starmer, raising concerns over the future of the government and its fiscal policies.
The uncertainty triggered a sharp decline in the British currency, which fell for five consecutive trading sessions and recorded its worst weekly performance since November 2024.
Sterling dropped as low as $1.3356 on Friday, while also weakening significantly against the euro.
Analysts said the naira’s relative resilience has been supported by the CBN’s aggressive monetary tightening and liquidity management policies.
Nigeria’s benchmark interest rate currently stands at 26.5 percent, creating attractive yields that continue to support foreign exchange inflows and reduce pressure on the local currency.
The apex bank has also sustained efforts to narrow the gap between the official Nigerian Foreign Exchange Market (NAFEM) and the parallel market, a move widely viewed as critical to improving investor confidence and long-term market transparency.
Nigeria’s external reserves, estimated at about $48 billion, have further strengthened the CBN’s ability to intervene in the market and curb excessive volatility.
However, strong demand for foreign currencies, especially from importers and parents paying overseas tuition fees, continues to place pressure on the market.
Meanwhile, the Bank of England retained its benchmark interest rate at 3.75 percent, while warning that rising energy prices linked to the Middle East crisis could trigger further inflationary pressures in the UK economy.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
