Bismarck Rewane, the Chief Executive Officer (CEO) of Financial Derivatives Company, has projected that the naira will trade between N1,600 and N1,650 in the official foreign exchange market in June, July.

He cited data that indicated effective measures by the Central Bank to manage money supply growth, which peaked at 78% in May last year, as the basis for his projection about the Nigerian currency.

He gave this projection while speaking at the recent Lagos Business School breakfast club meeting.

He said:

"The official and parallel market exchange rates have converged, with the spread now within a N50 margin, indicating that the Naira is now fairly priced.

"We expect that the weakening of the US dollar down 8.7% year-to-date could support the local currency, which is expected to remain stable throughout 2025."

Expert predicts new naira-dollar exchange rate Rewane also expected a cut of a hefty 50 basic points in the policy rate by the Monetary Policy Committee (MPC), when it held its next meeting.

The financial expert also said the Federation Account Allocation Committee (FAAC) was likely to maintain a robust N1.6 trillion, buoyed by reduced corporate income tax liabilities.

Additionally, Rewane anticipated further reductions in the prices of Premium Motor Spirit (PMS) to N845 per litre and diesel to N950 per litre.

He maintained that despite a surge in net foreign reserves and significant moderation in money supply growth, the naira remains undervalued by approximately 26.82%.

Compared to the NAFEM rate of N1,599.33 to the dollar, this suggests an undervaluation of 27.08%.

Highlighting broader economic trends, Rewane pointed out that the Purchasing Power Parity (PPP) rate for the naira should ideally stand at N1,158.50, particularly as the US dollar has weakened by 8.7% against global currencies year-to-date.

Naira-dollar could result in more opportunities

In his presentation to the CEOs attending the meeting, Rewane pointed them to key sectors where they could look to find value in the near term.

The sectors include power, which currently has over 50% unmet demand, and agriculture, where there is a rising need for storage, mechanisation, and processing capacity in a country facing severe food insecurity.

Rewane also spoke about the opportunities in the healthcare and pharmaceutical sectors with rising demand, weak public infrastructure and growing private sector need that is unmet.

However, he cautioned that energy sector investments in Nigeria remain constrained by policy uncertainties, forex risks, and tariff discrepancies, deterring potential investors.