Economist and Financial Derivatives Limited’s Managing Director, Bismarck Rewane, has predicted that the naira will soon stabilize between N1,600 and N1,650 against the US dollar.
Rewane made this statement during his speech at the June edition of the Lagos Business School Breakfast session.
During his mid-term evaluation of the current administration’s economy, the economist noted that the naira is still undervalued by 26.82 per cent. He also pointed out that the dollar’s 8.7 per cent decline so far this year could help strengthen the naira.
He explained that “The official and parallel market rates have converged more closely. Now trading within a 1–3 per cent margin. A major improvement from the 50–70 per cent gap observed pre-reforms. The spread is now within the N50 margin, meaning that the naira is now fairly priced and the naira will trade at about N1,600-N1,650/$”.
Looking ahead to June and July, Rewane forecasted that “inflation data will reveal a slight decline to 23.15 per cent. The real GDP growth for Q1 25 will come out at 3.4 per cent. Brent will trade at $60-$63 pb as OPEC+ increases output. Nigeria’s oil production will increase to 1.5 mbpd. The price of PMS will decline marginally to N845/litre. Diesel will trade at N950/litre. Corporate profitability in Q2’25 will increase as companies carry lower inventory. FAAC allocation will be flat at N1.6tn as corporate income tax clawback reduces tax liabilities.”
He further said that the Central Bank of Nigeria’s Monetary Policy Committee is expected to lower the benchmark interest rate by 50 basis points in its upcoming meeting. He also mentioned that the recent trade tariffs introduced by US President Donald Trump are unlikely to affect Nigeria significantly.
Rewane’s naira prediction was backed by analysts at Meristem, who believe that the exchange rate will remain stable at the official market, thanks to ongoing foreign exchange interventions and improved liquidity.
However, he added, “the parallel market is likely to remain under pressure, especially if downward risks to FX inflows persist and speculative demand stays elevated. As a result, the widening spread between both markets may linger in the near term,” he stated.
In May, the naira slightly appreciated at the official Nigerian Foreign Exchange Market, indicating a stable foreign exchange supply supported by the Central Bank’s continued interventions. Meanwhile, it depreciated on a month-to-month basis in the parallel market, increasing the gap between both markets from N1.69/$ in April to N24.25/$ in May.
According to Meristem’s monthly report, this was the first significant divergence since March 2025, which it attributed to strong demand pressures and speculation amid rising global uncertainties.
On company performance, Rewane gave a positive assessment, highlighting that businesses are seeing revenue and profit growth. He noted this reflects solid performance and reduced exposure to naira depreciation risks, due to the higher levels of locally denominated debt. He also observed that private firms now have quicker access to local financing, suitable for short-term needs, as shown by the rise in commercial paper issuances. This dependable domestic credit has supported business expansion and temporary financing needs.
These developments, he explained, have contributed to a favorable outlook for the Nigerian private sector as firms “adapt by repricing, local sourcing, and digital transformation. Investor sentiment is warming, fuelled by forex reforms, policy clarity, and signs of macroeconomic stabilisation. Investors are showing renewed interest, particularly in banks, infrastructure, and energy, but are still watching the policy environment. Portfolio investors are slowly returning, encouraged by higher yields, a more flexible exchange rate, and enhanced central bank transparency,” Rewane added.