Naira Depreciates to N1825/£ Amid Festive Season Demand

The Central Bank of Nigeria (CBN) reported that the naira has depreciated to N1825/£ against the British pound as of Monday. This marks a significant drop from earlier highs of over N1,900/£ earlier in the year, with the currency fluctuating between N1,750 and N1,850/£ this month.

The depreciation is attributed to heightened demand for foreign exchange during the festive season, as many affluent Nigerians travel abroad for holidays, particularly to the UK. Families also require foreign exchange for tuition and accommodation costs for children studying in the UK.

The CBN's rate cut has narrowed the real yield differential, increasing demand for currencies like the British pound and US dollar. Nigeria's gross external reserves have reached $55 billion, enabling the CBN to intervene in the foreign-exchange market and mitigate concerns about a currency collapse.

The British pound was trading around $1.33 as the UK prepared for its Autumn Budget.