By Chinwendu Obienyi
Rising inflation figures and increased demand have pushed the British pound sterling to a one-year high, reaching N2,035/£1 at parallel markets across Nigeria. This surge comes amid ongoing economic challenges and market responses to inflation data.
According to the Consumer Price Index (CPI), the United Kingdom saw a two per cent rise in inflation, slightly exceeding analysts’ predictions of 1.9 per cent. This uptick has led traders to reconsider their expectations that the Bank of England (BoE) will lower interest rates from their current 16-month high during the committee meeting next month. Despite this, the inflation rate, as reported by the Office for National Statistics, remains at the BoE’s target level, a milestone first achieved in May after three years. The pound reached $1.3044 against the dollar, marking its highest value in a year, and was recently trading up 0.4 per cent at $1.3017. Daily Sun investigations revealed that currency traders have been hoarding pounds, driving up demand for three consecutive days. The pound sterling traded at N2,009/£1 and N2,016/£1 on Monday and Tuesday, respectively. Concurrently, the euro traded at N1,740/€1, and the dollar stood at N1,596/$1.
Inflation has been a persistent issue in many economies, particularly following the COVID-19 pandemic, which led several countries, including Nigeria, into recessions. On Tuesday, the International Monetary Fund (IMF) downgraded Nigeria’s real GDP growth from 3.3 per cent to 3.1 per cent, citing weaker-than-expected performance in the first quarter of 2023.