Naira maintains ground near N1,850/£ despite global market pressures

The Nigerian naira maintained its position near the N1,850 resistance level against the British pound during midweek trading, reflecting relative stability in the local currency despite mounting global pressures.

Data from the official Nigerian Foreign Exchange Market (NFEM) window showed the naira trading at an average of N1,844/£ during the midweek session, signaling support from investors and cautious optimism among traders.

Analysts note that naira bulls are relying heavily on the Central Bank of Nigeria’s (CBN) recent policy guidance to sustain the currency.

The apex bank has communicated readiness to intervene should external shocks, particularly the ongoing conflict in the Middle East—referred to in market circles as the Iran War—place additional pressure on the naira.

“The CBN has backup plans to stabilize the naira if risk aversion triggers a sell-off in emerging market assets,” a market source said.

Since the outbreak of hostilities between the US and Israel against Iran, emerging market assets have faced pressure as investors flocked to safe-haven currencies like the US dollar.

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Nevertheless, support for the naira has persisted through increased purchases of high-yielding Nigerian bonds and local equities. Analysts expect this to cushion the local currency amid broader volatility, even as the MSCI Emerging Markets Currency Index is set for its largest monthly decline since the end of 2024.

Technical indicators suggest a mixed but cautiously positive outlook for the naira. The GBP/NGN medium-term trend is negative, signaling that the naira is stabilizing relative to the British pound.

The currency pair is trading below both short-term and long-term moving averages, giving the local currency a “sell” bias. The Relative Strength Index (RSI) for GBP/NGN, currently around 77.55 on some daily charts, indicates that the pound may be overbought.

The CBN’s recent monetary policy decisions have bolstered confidence in the naira. In late February 2026, the apex bank lowered the Monetary Policy Rate (MPR) from 27% to 26.5%, citing slowing inflation, which is projected to reach 12.94% this year. Foreign reserves have simultaneously hit a 13-year high, providing additional support to the local currency.

Global factors, however, continue to influence the naira’s performance. The British pound has outperformed the US dollar for the third consecutive day, trading near 1.3370 in early European session, as the US dollar faces pressure ahead of the Federal Reserve’s monetary policy announcement.

The US Dollar Index (DXY) hovered near a three-day low of 99.50, reflecting cautious sentiment among currency traders who expect the Fed to maintain interest rates in the current 3.50%–3.75% range.

In the UK, elevated energy prices due to the Middle East conflict have fueled stagflation concerns, influencing both sterling performance and global inflation expectations. The Bank of England is widely expected to hold its base rate at 3.75%, having paused rate cuts as inflation nears its 2% target.

Economic forecasts for the UK have been downgraded, with GDP growth expected to reach just 1.0% in 2026 and unemployment projected to rise to 5.5%, contributing to ongoing pressure on the pound.

Market analysts suggest that while the naira has moderated in value since the onset of global tensions, it remains resilient due to a combination of CBN intervention readiness, high-yield local assets, and supportive foreign reserves.

Technical signals also indicate that downward pressure on GBP/NGN has slowed, though a full bullish reversal has yet to materialize.

The coming days are likely to see continued monitoring of global events, including US and UK monetary policy decisions, as traders weigh the implications for the naira’s stability against major currencies.