Bismarck Rewane Believes Naira Is Undervalued by 11%, Shares Correct Exchange Rate
- Nigerian economist Bismarck Rewane says the current exchange rate of the naira does not reflect its true value
- He noted that currencies typically move toward their PPP-implied value over a five-year horizon
- Rewane provided insights to support his position and said he believes the future is bright if all goes well
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The naira remains undervalued by about 11% based on purchasing power parity (PPP) estimates, according to Bismarck Rewane, managing director of Financial Derivatives Company.
Rewane, while speaking at the 2026 Economic Outlook of the Association of Corporate Treasurers of Nigeria (ACTN) over the weekend, noted that the current fair value of the naira should be around N1,256.79/$ exchange rate.
Source: Getty Images
He noted that currencies typically adjust towards their PPP-implied values over a five-year period.
Why naira is undervalued?
During his presentation, Rewane provided a detailed analysis of the structural and cyclical factors influencing exchange-rate movements in Nigeria, including inflation dynamics, capital flows, productivity trends and external balances, BusinessDay reports.
On the role of treasurers, the renowned economist said the primary responsibility of a corporate treasurer is the optimisation of a company’s liquid resources, adding that this must be done with cautious optimism, especially in managing foreign-currency exposure and FX-related activities.
The event also featured a panel discussion with Adeyinka Ogunnubi, group treasurer of CFAO Nigeria, and Titilola Osinowo, group head of treasury and investments at Ardova Plc.
Osinowo outlined several practical measures for improving liquidity management, highlighting FX swaps and FX options as instruments treasurers should increasingly explore.
She stressed the importance of structured hedging and aligning cash flows to reduce FX risks.
she said, underscoring the role of natural hedging:
“If you have dollar receivables, you match your expenses with those dollar receivables, or you align your cash flows accordingly."
Source: Getty Images
On “smart allocations,” Ogunnubi, who also serves as national president of ACTN, said treasury management is about maximising every unit of cash at the lowest possible cost and risk.
He added that working capital should always be the first priority, noting that companies sometimes move from net negative to net positive cash positions, creating new allocation decisions.
” Ogunnubi said:
“Then the question becomes: what do you do?. Do you pay suppliers early? You may not be able to pay dividends ahead of time, but fundamentally, it comes down to identifying the most efficient and optimal use of cash at any given point.”
Naira exchange rate
In a related development, Legit.ng reported that the Nigerian Foreign Exchange Market (NFEM), the naira slipped slightly on Thursday, weakening by N1.38 to N1,422.07 per dollar, from N1,420.69 on Wednesday.
In the parallel market, the currency strengthened marginally to N1,487 per dollar, from N1,490, where it had traded for about two weeks.
Also, Nigeria’s external reserves continued to rise, reaching $45.98 billion as of January 21, 2026.
Source: Legit.ng
