Naira undervalued by 13% despite FX reforms, says Rewane
By Aboki Forex —
Renowned economist Bismarck Rewane has said the naira remains undervalued by more than 13 percent, even after major foreign exchange reforms and recent market stability.
Rewane, the Managing Director of Financial Derivatives Company (FDC), spoke at the Lagos Business School Breakfast Session on Wednesday, June 3, 2026. He presented an analysis based on Purchasing Power Parity (PPP), a common method for valuing currencies.
According to him, the naira’s fair value is N1,193.22 per dollar, while the current Nigerian Foreign Exchange Market (NFEM) rate stands at N1,374.92 per dollar. That means the currency is trading 13.22 percent below its fundamental value.
“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%,” Rewane said.
He explained that his analysis compared prices of goods and services in Nigeria with international prices. These included beverages, food, electronics, transportation, and household items.
Rewane noted that the naira has been volatile since the FX market liberalisation. The currency moved from about N410 per dollar in 2021 to over N1,900 per dollar in 2024. He said the reforms removed distortions that had plagued the currency.
“The Naira has depreciated by over 200% from 2023 to 2026, yet there is improved FX market efficiency and reduced distortions,” he said.
The economist predicted the naira will likely trade between N1,390 and N1,420 per dollar in the short to medium term. He cited Nigeria’s improving economic outlook as a key factor.
Rewane also pointed to stronger fundamentals. Nigeria’s gross external reserves grew from $32.91 billion in 2023 to $49.58 billion in 2026. Remittance flows rose from $19.55 billion to $23 billion over the same period.
Earlier, Yemi Kale, Chief Economist at Afreximbank, projected the naira would trade between N1,350 and N1,450 per dollar in 2026. He spoke at the FirstBank Nigeria Economic Outlook 2026, outlining scenario-based forecasts based on oil prices, FX inflows, inflation, and policy consistency.