Naira strengthens to N1,853/£1 against British Pound amid UK’s political instability
The Nigerian Naira has recovered from its April lows and shown signs of resiliency in the first half of May, while the British pound hit monthly lows amid a crisis in the UK ruling party.
The Nigerian Naira has recovered from its April lows and shown signs of resiliency in the first half of May, while the British pound hit monthly lows amid a crisis in the UK ruling party.
The British pound sterling plummeted when one of the most well-liked Labour Party politicians in the country threatened to overthrow UK Prime Minister Keir Starmer.
The future of Starmer’s government and its attempts to control the national debt were called into question by Manchester Mayor Andy Burnham’s challenge.
The CBN’s latest data showed the local currency closed near N1850/£1 mark on Thursday, having traded at N1882.9/£1 on Monday in the Nigerian foreign exchange market
The naira has remained in the N1825–N1950/£1 price range amid the optics in the UK economy and the Central Bank of Nigeria’s liquidity management strategies, particularly as currency traders reacted to the political situation in the United Kingdom.
The monetary policy rate set by the Central Bank of Nigeria (CBN) is still an astounding 26.5%. A “carry trade” floor is being created by this high yield, keeping the naira from falling as precipitously as the pound. Even though it still causes volatility, the continuous efforts to close the gap between the official NAFEM rate and the parallel market are viewed as an essential first step toward long-term transparency.
In addition, the Nigerian Apex Bank has some “firepower” to intervene in the market and reduce excessive volatility because Nigeria’s external reserves have stabilized at $48 billion.
The high demand for the pound and dollar from importers and parents paying offshore tuition fees keeps the “spread” (the difference between official and black-market rates) wide, even in the face of the naira’s stability in the Nigerian Foreign exchange market.
Nigeria’s foreign exchange outlook has been strengthened by Nigerian Crude remaining above $100/barrel in May 2026, although domestic production issues still limit the full impact of these high prices.
The British Pound’s value dropped for a fifth day on Friday in preparation for its worst week since November 2024, falling 0.4 percent to $1.3356. Burnham’s announcement that he was considering running for Parliament raised the possibility that he would attempt to succeed in Starmer.
It was the prime minister’s most recent insult after his Labor Party lost badly in last week’s municipal elections, sparking mounting calls for his resignation.
According to YouGov, the mayor of Manchester is the only senior UK politician with a net positive approval rating among voters, and many on the left of the Labour Party favor him.
The pound dropped 0.9 percent to $1.3403 late Thursday, the lowest since April 13, in the biggest decline since early February. Additionally, it fell against the euro by the greatest amount since March.
Meanwhile, the Bank of England (BoE) chose to maintain a bank rate of 3.75 per cent. The BoE presented a scenario framework that suggests rate hikes might be appropriate. Governor Andrew Bailey of the Bank of England issued a warning about “forceful tightening” if the Middle East conflict’s energy price shocks continue to fuel inflation.
