The Nigerian naira recovered from April lows and built cautious strength in May trading.
This recovery unfolded as global currency pressure intensified.
UK political uncertainty weakened the British pound.
Naira Gains Amid FX Stability
Political tension in the UK drove sterling’s decline.
Andy Burnham hinted at challenging Prime Minister Keir Starmer.
His move unsettled markets and raised doubts about government stability.
Investors questioned fiscal control and rising national debt.
The pound weakened further and hit monthly lows.
Nigerian FX markets quickly reflected this shift.
CBN data showed the naira trading at ₦1,850 per pound.
It strengthened from ₦1,882.9 earlier in the week.
The naira traded within ₦1,825 to ₦1,950 per pound.
Traders linked this range to liquidity management and external shocks.
Moreover, Nigeria’s policy rate stood at 26.5%.
High yields attracted carry trade inflows into naira assets.
As a result, this reduced pressure on sharp depreciation.
However, it did not eliminate market volatility.
UK Political Pressure Weakens Pound
Meanwhile, UK political tension continued to weigh on sterling.
Andy Burnham’s leadership hints unsettled financial markets.
His comments raised concerns about Prime Minister Keir Starmer’s authority.
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Investors worried about fiscal discipline and debt control.
The pound fell for five straight days.
It dropped to $1.3356 after earlier declines.
It recorded its worst weekly loss since November 2024.
Political uncertainty dominated sentiment across UK markets.
UK bond markets reacted strongly to instability.
Thirty-year gilt yields rose to about 5.7%.
Global energy shocks also increased inflation pressure.
The Bank of England held rates at 3.75%.
It warned of possible forceful tightening if inflation persists.
Governor Andrew Bailey signalled tougher policy action ahead.
CBN Buffers And Oil Support
Meanwhile, the Central Bank of Nigeria narrowed the gap between official and parallel rates.
Demand for foreign exchange remained strong.
Importers and students continued driving demand for dollars and pounds.
External reserves stood near $48 billion.
This position gave the Central Bank intervention capacity.
Oil prices stayed above $100 per barrel.
However, production constraints limited full benefits from higher crude prices.
Overall, the naira remained relatively stable.
Domestic policy support and global weakness strengthened its position.