Data from the Nigerian Foreign Exchange Market (NFEM) and activity across informal trading channels show the Naira weakening slightly against Sterling as global demand for safe-haven currencies rises and seasonal foreign exchange demand increases.
Movement in the Official Market
In the official market window, the Naira opened the day at ₦1,846.10 per Pound. Early trading sessions recorded mild volatility, with the rate briefly touching a high of ₦1,852.28 before climbing further to ₦1,856.06 by 6:00 a.m. WAT.
The movement represents an intraday depreciation of approximately 1.62 percent for the Nigerian currency from its opening position.
Market participants say liquidity conditions remain a central issue for authorised dealers as the Central Bank of Nigeria (CBN) continues to operate a “willing-buyer-willing-seller” foreign exchange framework. Analysts also note that the recent 50-basis-point reduction in the Monetary Policy Rate (MPR) to 26.5 percent has contributed to a slight recalibration in currency valuations.
At the time of reporting, the official mean exchange rate was hovering around ₦1,851.40 per Pound, reflecting a balance between corporate foreign exchange demand and available supply within the official window.
Parallel Market Dynamics
In the parallel market, commonly referred to as the black market, the Pound continues to trade at a modest premium to the official rate. Dealers report that the currency is currently exchanging within a band of ₦1,865 to ₦1,880 per Pound.
Despite the slight depreciation in the official market, the spread between the two markets remains relatively narrow at about 1.3 percent, suggesting a degree of stability compared with earlier periods of wider divergence.
Currency traders in major commercial hubs such as Lagos and Abuja say Monday mornings often bring an increase in demand linked to international school fee payments and personal travel allowances. However, they noted that current demand levels remain orderly, with no signs of panic buying.
The relative stability has been partly attributed to ongoing foreign exchange supply to Bureau De Change operators, a policy intervention that has helped absorb excess retail demand and ease pressure on the parallel market.
Key Drivers of the Pound–Naira Movement
Several macroeconomic and global factors are shaping the Pound-to-Naira exchange rate at the start of the week.
Global risk sentiment remains a key influence. Heightened geopolitical tensions in parts of the Middle East have encouraged investors to move toward safer currencies, strengthening major global currencies such as the Pound and the U.S. dollar against emerging-market currencies.
Nigeria’s external reserves also remain an important buffer. The country’s reserves are currently estimated at about $50.45 billion, providing policymakers with sufficient capacity to manage short-term liquidity shocks if necessary.
On the domestic front, a gradual disinflation trend is supporting the Naira’s underlying fundamentals. Headline inflation slowed to 15.10 percent in January, easing price pressures and improving the currency’s real value compared with levels recorded in 2024 and 2025.
Developments in the energy sector are also helping moderate foreign exchange demand. Increased domestic refining capacity is gradually reducing the volume of foreign currency required for petroleum imports, which historically placed significant pressure on Nigeria’s foreign exchange market.
Outlook for the Day
Analysts expect the Pound–Naira rate to remain relatively contained during Monday’s trading session, with projections suggesting a range of ₦1,845 to ₦1,865 per Pound in the official market.
Market participants are also watching for mid-week liquidity updates from the CBN, which could provide additional signals about foreign exchange supply conditions and near-term currency direction.