Naira rebounds to N1,814/£ as CBN policies narrow FX gap with parallel market

The Nigerian naira strengthened to N1,814 per British pound on Monday, its strongest level in July 2026, recovering from the N1,950/£ level seen at the end of 2025. The currency has been trading in a tight band between N1,810 and N1,830 per pound after mid-July consolidations, buoyed by the Central Bank of Nigeria's tight monetary policy, high interest rates aimed at curbing inflation, and efforts to clear foreign-exchange backlogs that have narrowed the gap between the official and parallel markets. Structural demand for foreign exchange from trade, refined fuel imports and external debt continues to support the naira's medium-term appreciation, while robust crude oil output and favorable oil prices have bolstered foreign-reserve inflows. Meanwhile, the Bank of England kept its rate at 3.75%, citing cautious optimism as UK services inflation and wage growth remain elevated, and the UK economy is expected to grow only 1.0-1.2% annually amid fiscal constraints. With the US dollar steady ahead of the Federal Reserve's policy decision and Middle-East tensions boosting the dollar's safe-haven appeal, the naira's gain reflects both domestic policy tightening and external factors. For Nigerians, a stronger naira lowers import costs and could ease inflationary pressure, but exporters may see reduced naira revenue; individuals and businesses should monitor CBN announcements, consider timing of foreign-exchange needs, and watch oil-price and UK-data trends for future moves.

SOURCE: https://nairametrics.com/2026/07/28/naira-rebound-sharply-against-british-pound-settles-at-n1814/