Naira trades around N2,177/£ in parallel market amid global Pound surge

The Nigerian naira traded around ₦2,177 to the British pound in the parallel market today, as the local currency continues to hover within a tight range driven by global forex dynamics and mounting demand for the British sterling.

Throughout April, the naira has remained in a consolidation phase against the pound, fluctuating between ₦2,100 and ₦2,180 in the unofficial market.

Currency traders cite sustained buying pressure on the British pound, supported by international monetary shifts, as a key driver of the naira’s limited volatility during the period.

Analysts project that the direction of the naira in 2025 will largely be influenced by foreign investor sentiment and capital flow, especially as Nigeria grapples with persistent currency pressure and limited dollar inflows.

The United Kingdom plays a significant role in Nigeria’s economic framework, ranking as the country’s second-largest trading partner and accounting for nearly 50% of total remittances sent by Nigerians abroad, according to Central Bank of Nigeria (CBN) data. Remittances are forecast to rise by 9% to $21 billion in 2024.

The UK also remains a top migration and education destination for Nigerian youth, driven by historical ties, common language, proximity, and a favorable time zone.

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Meanwhile, global forex dynamics continue to shape the demand for the British pound. UBS Group AG recently revised its forecast for the GBP/USD pair, citing a weakening U.S. dollar and improved prospects for the British currency.

The Swiss bank now expects the pound to hit $1.39 by March 2026. The pound has gained appeal due to its strong liquidity and potential in carry trade strategies, even though it is not formally classified as a safe-haven currency.

Contributing to the pound’s strength is its exemption from former U.S. President Donald Trump’s specific punitive tariff lists, unlike other major economies.

The UK was subjected only to a universal 10% rate, with no additional tariffs. This diplomatic approach has not only shielded the UK’s economy to some extent but may also position it favorably for future bilateral trade deals.

However, UBS cautioned that the UK’s heavily trade-dependent economy remains vulnerable to a potential global recession, which could weigh on the pound despite its recent resilience.

The U.S. dollar index stabilized at 99.079 after a 0.6% decline, with markets awaiting key economic indicators, including job growth figures and inflation metrics, for clues on the Federal Reserve’s next move.

As Nigeria’s currency remains susceptible to global trends, market watchers stress that reforms, investor confidence, and capital inflows will be crucial in determining the naira’s trajectory through 2025 and beyond.