Bismarck Rewane Speaks on Naira After CBN’s 23% Interest Rate Cut, Reveals What to Expect
- Bismarck Rewane said the naira could depreciate following the CBN’s decision to cut its benchmark interest rate to 23%
- He said the naira may not weaken significantly because Nigeria’s real interest rate remains positive and attractive to foreign investors
- Rewane warned that lower savings returns could push Nigerians towards alternative assets such as dollars and Bitcoin
PAY ATTENTION: Mark Legit.ng as a preferred source, and our content will appear higher in your Google feed!
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The naira could come under renewed pressure following the Central Bank of Nigeria’s (CBN) decision to reduce its benchmark interest rate to 23%, economist Bismarck Rewane has said.
Rewane, the Chief Executive Officer of Financial Derivatives Company (FDC), made the projection while speaking on Channels Television’s Business Morning programme on Wednesday, September 22, 2026.
Source: UGC
According to him, the naira is likely to depreciate, but the decline may be less severe than some investors expect because of the currency’s estimated fair value and Nigeria’s positive real interest rate.
“The naira will depreciate, but not as much as fear, because the naira fair value is about N1,150 to $1,” Rewane said.
The economist explained that the latest rate cut has reduced Nigeria’s real rate of return from approximately 11.1% to 7.61%.
Despite the decline, he said the return remains attractive compared with some advanced economies and could continue to encourage foreign investors to participate in carry trades.
Rate cut may affect foreign investments
Rewane said the interest-rate gap between Nigeria and major global economies remains an important factor that could help attract foreign capital, even after the CBN’s decision to lower borrowing costs.
However, he warned that the reduction could have implications for foreign portfolio investment (FPI), as investors may become less attracted to Nigerian assets if returns decline.
He suggested that remittances from Nigerians living abroad could increasingly help fill any gap created by weaker portfolio inflows.
The FDC boss also raised concerns about the possible impact of lower interest rates on domestic savings, noting that reduced returns on deposits could discourage Nigerians from keeping their money in traditional savings instruments.
“You either save or you consume, but the national savings is very low. So when you do this, it falls further,” he said.
Rewane warns Nigerians may turn to dollars, Bitcoin
Rewane said weaker returns on naira-denominated savings could also push some investors towards alternative assets, including foreign currencies and cryptocurrencies.
“The danger is that you may then begin to start to buy alternative assets, which includes dollars, Bitcoin,” he said.
He put Nigeria’s national savings at about N97 trillion, compared with an estimated gross domestic product (GDP) of N442 trillion.
According to him, the country needs to increase its savings base because savings provide the capital needed for investment, which in turn supports productivity and broader economic inclusion.
Source: Facebook
He, however, stressed that lower interest rates would need to be accompanied by stronger fiscal consolidation and measures to reduce leakages in government finances.
Such steps, he said, would be important to ensure that monetary easing translates into sustainable economic growth rather than creating additional pressure on the naira and the wider economy.
Source: Legit.ng
