Rewane: Naira's Current Exchange Rate Doesn't Reflect Its Real Value
- Renowned economist Bismark Rewane says the naira is undervalued by about 13% despite FX reforms
- The economist estimates the naira's fair value at N1,193.22/$ compared with a market rate of N1,374.92/$
- He says stronger FX inflows and economic fundamentals are needed for the currency to reflect its true value
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Bismarck Rewane the Managing Director of Financial Derivatives Company (FDC) has stated that the naira remains undervalued by over 13% in spite of large-scale FX reforms and currency market stability experienced recently.
Rewane said this during his presentation at the Lagos Business School Breakfast Session held on Wednesday, June 3, 2026.
The economist presented an analysis on the valuation of the naira based on the Purchasing Power Parity(PPP)-the commonly used economic concept used to evaluate currencies.
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Naira exchang rate
According to him while the efficiency and transparency of the local FX market has improved following the implementation of the reforms by the Central Bank of Nigeria (CBN), the local currency is trading below its fundamental value.
He stated.
"We can see that on a PPP basis, with NFEM rate N1,374.92 to the dollar, the Naira is still undervalued by 13.22%."
His analysis projected that the PPP rate for the naira stood at N1,193.22 per dollar while the current NFEM rate is N1,374.92 per dollar.
His analysis involved comparing the prices of various goods and services in Nigeria with international prices ranging from beverages and food to electronics, transportation and household goods.
The economist said that the naira had been volatile ever since the FX market liberalisation which led to its devaluation from approximately N410/$ in 2021 to over N1,900/$ in 2024, and that the reforms had removed distortions that plagued the currency.
He asserted that though there has been a steep devaluation of the naira, the reforms have increased transparency, improved the efficiency of the FX market and greatly narrowed the gap between the official and parallel FX markets, BusinessDay reports.
Rewane said:
"The Naira has depreciated by over 200% from 2023 to 2026, yet there is improved FX market efficiency and reduced distortions."
Source: Getty Images
Naira prediction
He also predicted that naira is likely to remain in a range of N1,390 - N1,420 per dollar in the short-to-medium term given the country’s improving eonomic outlook.
The economist showed during his presentation that Nigeria’s gross external reserves grew from $32.91billion in 2023 to $49.58billion in 2026 while remittance flows rose from $19.55billion to $23billion during the same period.
CBN explains naira exchange rate against US dollar
Earlier, Legit.ng reported that the naira is projected to trade between N1,350 and N1,450 per US dollar in 2026.
Yemi Kale, Chief Economist at the Africa Export-Import Bank (Afreximbank), made the projection while delivering the keynote address at the FirstBank Nigeria Economic Outlook 2026.
Kale outlined scenario-based forecasts for the USD/NGN exchange rate, taking into account oil prices, foreign-exchange (FX) inflows, inflation trends, and policy consistency.
Source: Legit.ng
