Naira Gains Ground Against Pound as CBN Holds Rates, Reserves Stay Strong

The Nigerian naira continued its upward trend against the British pound in the foreign exchange market last week. Data from the Central Bank of Nigeria (CBN) shows the naira closed at N1,823 per pound on Friday, June 5, 2026. That is an improvement from the beginning of June when the rate was around N1,845 per pound.

The appreciation comes as the CBN sticks to its tight monetary policy. The bank kept the Monetary Policy Rate (MPR) at 26.5% and the Cash Reserve Ratio (CRR) at 45%. These measures aim to reduce excess liquidity in the financial system and support the naira.

Nigeria’s foreign reserves, estimated at about $50 billion, have also helped. High crude oil prices, now around $100 per barrel, have boosted the country’s foreign exchange earnings and reserves. Market analysts say the naira’s strength in the domestic market reduced the pound’s value even though the British pound gained against the US dollar internationally last week.

Despite improvements in the official market, the CBN still faces challenges in increasing the supply of foreign currencies. Demand from manufacturers, importers, and service providers remains high. This keeps pressure on exchange rates. While the official rate has stayed around N1,810 to N1,815 per pound, the parallel market rate remains above N1,850 per pound.

Analysts say global energy markets will continue to affect the naira. Strong oil prices could help the CBN maintain foreign reserves and support the local currency. Weaker oil demand or production could put pressure on the naira.

The British pound has also faced pressure internationally. Stronger-than-expected US employment data strengthened the US dollar. The pound fell below 1.34 against the dollar, declining by about 0.37% in recent trading sessions. The stronger dollar followed positive US Non-Farm Payroll (NFP) figures. These increased expectations that the US Federal Reserve may keep interest rates higher.

Geopolitical developments in the Middle East have also influenced currency markets. A ceasefire agreement helped ease some concerns, but tensions remain in the region. This keeps investors cautious. Analysts believe the US dollar could stay strong if geopolitical risks continue and if expectations of tighter US monetary policy persist.

Traders are watching upcoming US economic data, especially employment figures. These could influence future Federal Reserve decisions and affect movements in global currency markets.