Naira Strengthens Against British Pound at N1,842/£1

The Nigerian naira has recently appreciated against the British pound, trading at N1,842/£1, as the Central Bank of Nigeria (CBN) implements measures to mop up dollar liquidity from the market. This price action indicates a significant psychological break below the N1,900 mark, suggesting a sustained resistance level for the naira throughout 2025 and 2026.

The CBN's efforts include removing excess dollars from the banking system to strengthen the naira, which could lead to rapid appreciation and potentially disrupt the foreign exchange market. The CBN aims to boost external reserves to $51 billion by the end of 2026 while preventing traders from selling at higher rates.

Additionally, the CBN is targeting excess naira liquidity currently exceeding N52 trillion held via the standing deposit facility (SDF) to curb dollar demand and prevent devaluation of the naira. Meanwhile, the British pound is under pressure against the US dollar due to fiscal concerns in the UK and changes in US trade policy.