Bismarck Rewane Predicts Naira to Trade at N1,600–N1,650/$
Currency Now ‘Fairly Priced’ as Exchange Rates Converge
Economist and Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, has projected that the naira will stabilize between N1,600 and N1,650 per dollar in the near term.
Speaking at the June edition of the Lagos Business School Breakfast Session, Rewane noted that Nigeria’s exchange rate has undergone significant reform, narrowing the gap between the official and parallel market rates to within 1–3% — a marked improvement from the previous 50–70% spread.
“The spread is now within the N50 margin,” Rewane said. “This indicates that the naira is now fairly priced.”
He further emphasized that the Nigerian currency remains undervalued by 26.82%, and with the US dollar weakening by 8.7% year-to-date, there is room for the naira to strengthen further.
June/July Economic Outlook: Inflation, Oil, GDP and Fuel Prices
Key Macroeconomic Forecasts
Rewane’s mid-year review also offered a snapshot of the expected performance of Nigeria’s economy during the June/July 2025 period:
Inflation: Slight decline to 23.15%
Q1 2025 Real GDP Growth: 3.4%
Brent Crude Oil: To trade at $60–$63 per barrel amid increased OPEC+ output
Oil Production: Increase to 1.5 million barrels per day
PMS (Petrol): Price expected to fall slightly to N845/litre
Diesel: Expected to trade at N950/litre
FAAC Allocation: Remain flat at N1.6 trillion as corporate income tax clawbacks ease liabilities
Rewane also projected that the Central Bank of Nigeria’s Monetary Policy Committee (MPC) would cut the benchmark interest rate by 50 basis points at its next meeting.
FX Market Dynamics: Official Rate Stable, Parallel Market Under Pressure
Meristem Analysts Support Rewane’s Outlook
Analysts at Meristem Securities echoed Rewane’s projections, stating that the official exchange rate is likely to remain relatively stable due to continued FX interventions and improved liquidity.
However, they warned that the parallel market may face renewed pressure if speculative demand and risks to FX inflows persist.
In May 2025, the naira appreciated at the official window but depreciated at the parallel market, widening the spread to N24.25/$, up from N1.69/$ in April marking the first notable divergence since March 2025.
“This divergence is driven by sustained demand pressures and speculative activities amid global uncertainties,” Meristem noted in its monthly report.
Corporate Performance: Positive Outlook for Nigerian Businesses
Revenue Growth, Domestic Credit Access Boost Business Confidence
Rewane described the current corporate climate as strong and resilient, with robust revenue and profit growth driven by:
Lower inventory levels
Local sourcing of inputs
Repricing of goods and services
Increased access to domestic credit, especially through commercial papers
He explained that Nigerian corporates have shielded themselves from naira volatility by holding more domesticated debt, avoiding the risks of foreign loan devaluation.
“The private sector now has faster access to local working capital, which has helped bridge financing gaps and drive expansion,” he noted.
Investor Sentiment: Renewed Interest in Nigeria’s Market
Forex Reforms and Policy Clarity Attracting Portfolio Investors
Rewane highlighted that investor sentiment is gradually improving, buoyed by:
Recent foreign exchange reforms
Greater policy clarity from the federal government
Macroeconomic stabilization signals
Higher yields in the local market
“Investors are returning particularly in banking, infrastructure, and energy sectors, though many still watch the policy space closely,” he said.
He added that portfolio investors are cautiously re-entering the Nigerian market, supported by a more flexible exchange rate regime and enhanced transparency from the Central Bank of Nigeria.
Conclusion: A Cautiously Optimistic Outlook
With FX markets aligning, inflation potentially easing, and corporate earnings on the rise, Rewane’s projections paint a picture of measured optimism for Nigeria’s economy in 2025. However, the persistence of speculative pressure in the parallel market and the need for sustained policy consistency remain critical for long-term stability.
