The Federal Government has injected approximately $8 billion to stabilise the naira’s exchange rate against the US dollar, according to Bismarck Rewane, Managing Director/CEO of Financial Derivatives Company. He attributed the local currency’s recent appreciation to the intervention efforts of the Central Bank of Nigeria (CBN). Speaking on Channels Television, Rewane cautioned that the naira’s rapid strengthening is temporary and should be approached with caution. “We’re seeing the naira strengthening, but let’s not be too hasty—it will correct itself,” he warned.
He highlighted that Nigeria’s external reserves, previously over $40 billion, are depleting, while the country has borrowed $4 billion in bond issues. “When you put all these together, we have spent almost $8 billion to sustain the naira at its current levels,” he revealed.
Naira’s Performance in FX Markets
Despite a steady decline in external reserves, the naira has maintained relative stability across foreign exchange (FX) markets. According to CBN data:
- The naira appreciated to N1,502.50/$1 last week, up 0.56% from N1,511/$1 the previous week.
- The highest rate quoted by authorised dealers was N1,509/$1, stronger than N1,520/$1 recorded the previous Friday.
- The lowest exchange rate recorded was N1,491/$1, compared to N1,500/$1 the week before.
- At the parallel (black) market, the naira gained N45, strengthening from N1,555/$1 to N1,510/$1.
- Economic Outlook: Gains and Challenges
Rewane noted that the naira has appreciated by 9% in 2025, supported by CBN reforms aimed at improving market efficiency. He added that inflationary pressures are easing, presenting a positive outlook for Nigeria’s GDP growth.
“Petrol and diesel prices are cooling, and the Purchasing Managers’ Index (PMI) is expanding, indicating a strengthening economy,” he said.
However, he warned of key economic challenges, including:
- High Money Supply: At 17%, increasing inflation risks.
- Elevated Interest Rates: Raising borrowing costs for businesses and individuals.
- Rising Utility and Transaction Fees: Increased PoS, ATM, telecom, and electricity tariffs.
Inflation Debate: Official vs. Real Figures
On inflation, Rewane questioned the official drop from 34.8% in December 2024 to 24.48% in January 2025, arguing that the real inflation rate remains much higher. His team at FDC estimated it at 33.35%, reflecting the reality on the streets.
“The man on the street does not believe that inflation has come down,” he asserted.
Meanwhile, at the 299th Monetary Policy Committee (MPC) meeting, CBN Governor Olayemi Cardoso acknowledged concerns over the methodology used in recalculating inflation, stating that comparing the revised figures with previous data was akin to “comparing apples with oranges.” As Nigeria continues efforts to stabilise its currency, experts urge policymakers to remain cautious, ensuring that short-term gains translate into long-term economic stability.
