The British Pound Sterling wrapped up January 2026 with a measured and largely stable performance against the Nigerian Naira, underscoring a month marked by improving confidence in the foreign exchange market and tighter liquidity controls.
By the close of trading on Friday, January 30, the gap between the official and parallel markets had continued to narrow, reinforcing perceptions that recent stabilisation efforts by the Central Bank of Nigeria (CBN) are gaining traction. Market participants point to calmer price movements and reduced speculative pressure as key highlights of the month.
In the official Nigerian Foreign Exchange Market (NFEM), the Pound began the day around ₦1,916.25. Early trading was characterised by mild fluctuations, with the rate briefly touching a high near ₦1,917.35 and dipping to about ₦1,909.70 before settling close to ₦1,912.64 by mid-morning. The subdued movement reflected a more orderly market environment compared with the sharp swings seen late last year.
Analysts attribute the relative strength of the Naira to the sustained rollout of the Electronic Foreign Exchange Matching System (EFEMS), which has improved transparency and price discovery for major currencies. At just above ₦1,910, the Pound’s official rate represents a notable retreat from the ₦2,000-plus levels recorded during periods of heightened volatility in the second half of 2025. Stronger external reserves and consistent crude oil output have also provided underlying support.
Activity in the parallel market told a similar story of restraint. The Pound traded mostly between ₦2,010 and ₦2,025, maintaining its customary premium over the official window but without the sharp end-of-month spikes traders have come to expect. Dealers across Lagos, Abuja, and Kano reported that demand was largely driven by school fees payments and personal travel needs, with supply sufficient to prevent sudden price surges.
Currency traders noted that the calmer tone suggests more corporate demand is being met through official channels, reducing pressure on the informal market. This shift has helped dampen volatility and improved sentiment among both dealers and end users.
As the market heads into the weekend, expectations for the Naira remain cautiously optimistic. Economists believe that the Pound–Naira exchange rate finding stability around the ₦1,900 range in the official market provides a solid base for February, particularly as inflationary pressures are forecast to ease further over the course of 2026.