The Nigerian Naira recorded gains against the British Pound across both the official Nigerian Foreign Exchange Market (NFEM) and the parallel market on Thursday, July 2, 2026. This appreciation follows sustained intervention efforts by the Central Bank of Nigeria (CBN).
On the official NFEM, the British Pound opened at approximately N1,825/£1, an improvement from the N1831/£1 recorded at the close of Wednesday’s trading session. Meanwhile, the Sterling exchanged at around N1905/£1 in the parallel or black market.
The CBN's aggressive strategy to maintain tight liquidity in the financial system is yielding results. A substantial amount of Naira has been withdrawn from Nigerian banks, supported by an MPR of 26.5 percent and a CRR of 45 percent.
Reduced excess liquidity in the system limits the capacity of parallel market buyers and institutional traders to acquire foreign exchange at prevailing rates. The apex bank's efforts to absorb liquidity aim to reduce demand for dollars, potentially bolstering other sources of dollar liquidity.
These sources include US dollar inflows into portfolios, diaspora remittances, and official dollar inflows from the central bank and government into bond portfolios. The mirroring of official and parallel market rates suggests that the era of speculation and wide divergence may be concluding.
NFEM rates for the US Dollar hovered between N1,370-N1,380/1$, indicating a narrowed premium on the parallel market. Through calibrated BDC auctions and an accretion of foreign reserves from oil sales and exports, the CBN has addressed panic buying, a key driver of parallel market divergence.
Market participants anticipate that the currency's performance in the coming weeks and months will depend significantly on crude oil receipts, diaspora remittances, portfolio inflows into Nigeria, and the scale of CBN intervention to enhance foreign exchange market liquidity.
British Pound Holds Strong Against US Dollar
The British Pound Sterling attracted bids, nearing 1.3300 against the Greenback in the European session on Thursday. This advance comes amid hints of fiscal discipline from the UK’s likely new Prime Minister, Andy Burnham, which has calmed markets.
Burnham stated his intention to deliver a radical shake-up of Britain’s politics, returning power from Westminster to local people and fostering partnership over confrontation. He aims to kick-start 'good' economic growth over the next decade.
Markets continue to assess the UK’s political transformation following Burnham’s recent ascension. Trust in the UK’s public debt is seen as essential, and while Burnham’s statements on fiscal responsibility support the pound short-term, future budgets are expected to show signs of fiscal policies promoting more public spending.
All attention is now on the US jobs data, expected later in the day, which may provide clues on the US interest rate outlook. The US Nonfarm Payrolls (NFP) report is projected to show a rise of 110K jobs for June, with the unemployment rate anticipated to remain steady at 4.3%.
Any indication of resilience in the US labor market would likely strengthen the Greenback, posing headwinds for major currency pairs. The US dollar index (DXY) was trading at approximately 101.20 in early European trade on Thursday, as markets awaited the crucial US employment figures for June.
