The Nigerian naira strengthened against the British pound during the first week of June, reflecting continued support from the Central Bank of Nigeria’s monetary and foreign exchange management measures.
According to official market data, the naira closed at approximately ₦1,823 per pound sterling on June 5, improving from levels above ₦1,840/£ recorded at the beginning of the week. The movement suggests a modest recovery in the local currency amid ongoing efforts to improve liquidity conditions in the official foreign exchange market.
The Central Bank maintained its tight monetary policy stance, leaving the Monetary Policy Rate (MPR) at 26.5% and the Cash Reserve Ratio (CRR) at 45%. These measures continue to support exchange rate stability by moderating excess liquidity within the financial system.
Nigeria’s external reserve position remains supportive of the naira, aided by relatively strong crude oil prices and sustained foreign exchange inflows. The country’s reserve buffer provides additional capacity for market interventions aimed at reducing excessive volatility in the FX market.
Despite the improvement in the official market, demand for foreign exchange from importers, manufacturers, and other businesses continues to exert pressure on currency markets. As a result, a premium persists between official and parallel market exchange rates.
On the global front, the British pound faced headwinds against the U.S. dollar following stronger-than-expected U.S. economic data, which reinforced expectations of a cautious approach to interest rate cuts by the U.S. Federal Reserve. The resulting strength of the dollar limited gains in major currencies, including the pound.
Looking ahead, the outlook for the naira will continue to depend on the effectiveness of domestic policy measures, the level of foreign exchange inflows, global oil market developments, and broader international financial conditions.
