The Nigerian naira broke a key resistance level against the British pound sterling.
The official interbank rate, which reflects a slight strengthening of the naira in recent weeks, currently stands between N1,948/£ and N1,950/£ in the official market.
This aligns with a broader trend of naira appreciation following the notable devaluation at the start of President Tinubu’s administration.
However, rates in the parallel (black) market remain noticeably higher due to persistent demand pressures and limited liquidity, frequently surpassing N2,000/£.
The naira strengthened to N1,945.8/£ at the Nigerian Foreign Exchange Market on Friday. The pair has shown marginal volatility in 2025, influenced by global factors and Nigeria’s ongoing economic reforms.
The GBP/NGN ratio is up about 2.67 per cent year-to-date, indicating that the pound has gained value against the naira overall. The official–parallel market spread has narrowed from 20 per cent to about 5–10 per cent due to the CBN’s exchange rate unification and crackdown on parallel market activities.
The naira remains supported by inflows from the Dangote Refinery, annual remittances of around $20 billion, and diaspora contributions. However, it continues to face pressure from speculation and capital outflows.
U.S. Dollar Index Shows Modest Strength in Latest Session
The U.S. Dollar Index (DXY) settled with slight gains near the 99 mark, reversing the previous week’s decline and extending its recovery from mid-September 2025 lows. The greenback’s rebound accelerated as U.S.–China trade talks stalled, raising hopes of fresh diplomatic progress following President Donald Trump’s indication of plans to meet Chinese leader Xi Jinping next week.
Investor sentiment in Washington, however, remained dampened by the ongoing U.S. federal government shutdown.
The long-discussed but unconfirmed Trump–Putin summit and the Russia–Ukraine conflict remained largely in the background on the geopolitical front. Meanwhile, U.S. Treasury yields faced resistance to their recent decline, edging higher in the latter half of the week.
Currency traders increased bets that the Federal Reserve would deliver a series of quarter-point rate cuts after new inflation data suggested price pressures were easing.
According to the latest Bureau of Labour Statistics (BLS) report, the Consumer Price Index (CPI) rose 3 per cent year-on-year in September, slightly above August’s 2.9 per cent but still below forecasts.
The softer reading reinforced expectations that inflation is steadily easing, giving the Fed more room to adopt a looser monetary stance. Futures tied to the Fed’s benchmark rate now imply an almost certain rate cut to a range of 3.75 per cent – 4 per cent at the October 29 meeting.
Markets also estimate a 95 per cent probability of another cut in January and a 55 per cent likelihood of an additional reduction in December. With inflation gradually approaching the Fed’s 2 per cent target, confidence is growing that policymakers are leaning toward a more accommodative policy path.
Prolonged U.S. Government Shutdown Weighs on Confidence
- There is still no end in sight to the U.S. government shutdown as Washington’s political gridlock continues to unsettle markets. The next vote is scheduled for Tuesday, though few on Capitol Hill expect a breakthrough, as the Senate adjourned for the weekend.
- Now in its 24th day, this is already the second-longest shutdown in U.S. history. If it continues until November 5, it will surpass the 35-day record set in 2018–2019.
- The economic effects are increasingly visible: business confidence is weakening, hundreds of thousands of federal employees remain unpaid, and essential public services are operating with minimal staff. Economists warn that each additional week of closure could shave tenths of a percentage point off quarterly GDP growth, dampening consumer spending and job creation.
- A Republican-led proposal to authorize partial government payments was blocked by Democrats on Friday, deepening tensions in the Senate once again.
