Bismarck Rewane, economist and Managing Director of Financial Derivatives Company Limited, has projected that the naira will trade within the range of ₦1,600 to ₦1,650 against the US dollar in the near term.
Speaking at the June edition of the Lagos Business School Breakfast Session, Rewane explained that the Nigerian currency remains undervalued by 26.82%, even as the US dollar has weakened by 8.7% year-to-date. This shift, he said, could help support the naira’s recovery. He noted that the exchange rate gap between the official and parallel markets has narrowed significantly, now within a 1–3% margin, compared to the 50–70% spread observed before recent reforms. According to him, the current ₦50 margin between both markets indicates that the naira is now fairly priced.
Rewane also gave a broader outlook on Nigeria’s economy, suggesting that inflation may decline slightly while economic growth continues. He anticipates improvement in key sectors such as oil production and consumer goods, with fuel prices seeing marginal adjustments. He believes corporate profitability will rise, aided by lower inventory costs and access to local financing, while revenue from the Federation Account Allocation Committee (FAAC) is expected to remain steady due to reduced tax liabilities.
On monetary policy, he predicted that the Central Bank of Nigeria’s Monetary Policy Committee would cut the benchmark interest rate by 50 basis points in its next meeting. He also noted that Nigeria would likely remain insulated from the effects of trade tariffs recently introduced by US President Donald Trump.
His outlook on the naira was echoed by analysts at Meristem, who also expect stability at the official market, driven by ongoing FX interventions and improved market liquidity. However, they warned that the parallel market could remain under pressure if foreign exchange inflows decline and speculative demand remains high, potentially leading to a renewed widening of the exchange rate spread.
In May, the naira appreciated slightly at the official exchange window due to steady FX supply from the Central Bank. However, it depreciated on the parallel market, pushing the spread between the two markets from ₦1.69/$ in April to ₦24.25/$ in May. Meristem described this as the first notable divergence since March 2025, attributing it to sustained demand pressures and speculative activity amid global uncertainty.
Rewane also painted a positive picture of corporate Nigeria, citing strong revenue and profit performance. He highlighted how firms are increasingly funding operations locally, which offers protection from currency depreciation linked to foreign loans. The private sector, he added, now has quicker access to domestic credit—particularly through commercial papers—helping to support business expansion and short-term financing.
He concluded that Nigeria’s private sector is adapting well through local sourcing, repricing strategies, and digital innovation. Investor sentiment is gradually improving, encouraged by exchange rate reforms, clearer government policies, and signs of broader economic stability. Sectors such as banking, infrastructure, and energy are beginning to attract renewed interest, while portfolio investors are slowly returning, drawn by higher returns, a more flexible FX regime, and increased transparency from the Central Bank.
