Political Turmoil Pushes Pound Toward 2026 Low Against Naira

June 22 () — The British pound sterling is trading near its lowest level of the year against the Nigerian naira as growing political uncertainty in the United Kingdom weighs heavily on investor sentiment and weakens demand for the currency.

According to the latest data from the Central Bank of Nigeria (CBN), the naira closed at N1,806 per pound sterling, reflecting a stronger local currency position amid ongoing reforms in Nigeria’s foreign exchange market.

The pound has come under pressure following widespread media reports suggesting that UK Prime Minister Keir Starmer could face mounting pressure to step down amid deepening political divisions within the ruling Labour Party.

The speculation intensified after Greater Manchester Mayor Andy Burnham secured a parliamentary seat in a recent by-election, fueling discussions about a potential leadership challenge.

In international markets, sterling fell by as much as 0.4 percent to $1.3181, bringing it close to its 2026 low of $1.3159recorded in March.

A break below that level would mark the pound’s weakest performance against the US dollar since November.

Analysts say Nigeria’s tighter monetary policy stance is also contributing to the pound’s weakness against the naira.

The CBN has maintained elevated interest rates and continued foreign exchange liberalisation measures aimed at attracting foreign portfolio investments into naira-denominated bonds and fixed-income securities.

The policy has helped reduce speculative demand for foreign currencies while boosting confidence in local assets.

Nigeria’s external reserves, currently estimated at about $51 billion, have strengthened the apex bank’s ability to support foreign exchange liquidity through targeted interventions and FX auctions for manufacturers, importers and students.

Meanwhile, broader global market sentiment remains cautious. The US Dollar Index (DXY) continues to trade above 101 points, supported by the Federal Reserve’s hawkish outlook and expectations of higher interest rates, adding further pressure on major currencies, including the pound sterling.