Bismarck Rewane, Managing Director and CEO of Financial Derivatives Company (FDC), has cautioned Nigerian policymakers against complacency following the naira’s recent stability and predictability.
Rewane described the naira’s rapid appreciation as “temporary”, urging authorities to approach the situation with restraint to avoid potential economic pitfalls.
Naira’s Gains Require Careful Management
Speaking during a presentation on Channels Television on Friday, Rewane stated,
“We’re seeing that the naira is strengthening, but with caution.
Let’s not be too hasty because it’s going to correct itself.”
He highlighted several key factors influencing the naira’s performance, including:
- Nigeria’s external reserves dropping from over $40 billion,
- The issuance of $4 billion in bonds, and
- An estimated $8 billion spent supporting the naira at current levels.
Naira Sustains Gains Despite Falling Reserves
Despite a $3 billion year-to-date decline in Nigeria’s external reserves, the naira continued to show resilience across foreign exchange (FX) markets.
According to Central Bank of Nigeria (CBN) data, the naira appreciated by 0.56%, rising from N1,511/$ last week to N1,502.50/$ at the Nigerian Foreign Exchange Market (NFEM).
Currency dealers quoted the dollar at a high of N1,509 on Friday, stronger than the N1,520 rate recorded the previous week. The naira also reached its lowest rate of N1,491/$, an improvement from N1,500/$ the prior week.
Parallel Market Also Reflects Naira Strength
In the parallel (black) market, the naira appreciated by N45, gaining 2.0% as the dollar traded at N1,510 on both Thursday and Friday, compared to N1,555 the previous week.
Cautious Optimism Amid Positive Indicators
While acknowledging the naira’s 9% appreciation in 2025, Rewane warned that the recent surge should not be overestimated.
“The new-found stability of the naira should be treated with caution,”
He said, adding that market fundamentals still pose risks.
However, Rewane pointed out positive trends for Nigeria’s economy, including:
- Easing inflationary pressures,
- Positive GDP growth,
- Cooling petrol and diesel prices, and
- An expanding Purchasing Managers’ Index (PMI).
CBN Reforms Behind Naira’s Rally
The naira’s rally, which began in December, has been linked to key reforms by the CBN aimed at improving transparency and efficiency in the FX market.
Despite these gains, Rewane concluded with a reminder that cautious policymaking remains essential to sustaining the naira’s stability in the long term.
