Nigeria's Naira Holds Firm Against British Pound Despite CBN Rate Cut

The Nigerian naira has maintained its relative strength against the British pound in recent times, despite the Central Bank of Nigeria's (CBN) decision to lower its benchmark interest rate.

The CBN recently reset the Monetary Policy Rate to 23%, down from 26.5%, a move that would normally reduce the appeal of naira-denominated assets to some foreign investors.

However, improved dollar liquidity and stronger external buffers have provided support to the foreign exchange market, allowing the naira to remain resilient against major foreign currencies.

The CBN's decision to retain the Cash Reserve Requirement for deposit money banks at 45% and the CRR for merchant banks at 16% has also contributed to the stability of the currency.