Naira steadies at N1,837/£ as stronger reserves support FX market

The naira traded steadily against the British pound on Thursday, exchanging at about N1,837/£1, as improved foreign exchange liquidity and stronger external reserves continued to support stability in Nigeria’s currency market.

Trading in the pound remained within the recent monthly range of N1,813/£1 to N1,862/£1, with market participants expecting the exchange rate to remain broadly anchored around the N1,840 level in the near term.

Demand for the British currency has remained resilient, driven largely by payments for education, medical tourism and other overseas obligations in the United Kingdom.

The relative stability comes amid broader improvements in Nigeria’s foreign exchange market following reforms introduced by the Central Bank of Nigeria.

The CBN recently disclosed that the gap between the official exchange rate and the Bureau de Change market had narrowed to below two per cent, while external reserves climbed above $52.5 billion, boosting confidence in the foreign exchange market.

The stronger reserve position has improved the country’s capacity to meet external obligations and provide liquidity during periods of market pressure.

Market analysts noted that continued inflows from crude oil exports, remittances and foreign portfolio investment have helped support reserve growth, although sustained stability will depend on maintaining these autonomous inflows.

Internationally, the British pound weakened slightly against the United States dollar after investors sought the greenback’s safe-haven appeal amid renewed geopolitical uncertainties in the Middle East.

Comments from United States President Donald Trump suggesting progress in discussions involving Iran contrasted with cautious remarks from Vice President JD Vance, who warned negotiations could remain difficult, supporting demand for the dollar.

Meanwhile, weaker-than-expected United States labour market data provided some relief for sterling.

Private sector employment increased by only 44,000 jobs in July, below market expectations of 70,000, reinforcing expectations that the US Federal Reserve may adopt a less aggressive monetary stance if economic conditions soften further.

Attention has now shifted to Friday’s US non-farm payroll report, which investors believe could shape expectations for future Federal Reserve policy.

In the United Kingdom, the Bank of England has maintained its policy rate at 3.75 per cent, reflecting persistent services inflation and wage pressures that have slowed the pace of monetary easing.

The relatively higher UK interest-rate environment continues to provide support for sterling in global currency markets.

Analysts expect the pound to remain largely driven by external developments in the near term, with investors awaiting the release of the United Kingdom’s second-quarter gross domestic product figures later this month for clearer signals on the country’s economic outlook