The federal government has spent about $8 billion to stabilise the exchange rate of the Naira to the US dollar at its current levels.
Managing director/CEO of Lagos-based Financial Derivatives Company, Bismarck Rewane, who revealed this, attributed the steady appreciation of the naira was as to this intervention by the Central Bank Nigeria (CBN)
Rewane made this known during a presentation on Channels Television which comes against the backdrop of the monetary policy committee meeting.
The economist warned that the quick appreciation of the naira is “temporary” and should be treated with caution, advising Nigerian policymakers not to be “carried away”.
“We’re seeing that the naira is strengthening but with caution. Let’s not be too hasty because it’s going to correct itself,” Rewane said.
“There are many things that are happening: reserves of over $40 billion are coming down. We’ve also borrowed $4 billion in bond issues. When you look at all of that, we’ve almost spent $8 billion to support the naira at the current levels,” he revealed.
But the naira maintained stability across foreign exchange (FX) markets despite steady decline in external reserves.
Data from the Central Bank of Nigeria (CBN) showed that the naira appreciated to N1,502.50 per dollar week-on-week, gaining 0.56 per cent or N8.50 compared to N1,511/$ closed the previous week at the Nigerian Foreign Exchange Market (NFEM).
Authorised currency dealers quoted the dollar at the highest rate of N1,509 on Friday, stronger than N1,520 last week Friday.
The market recorded the lowest rate of N1,491 per dollar on Friday as against N1,500 last week at NFEM.
At the parallel market, popularly called black market, the naira appreciated by N45, gaining 2.0 per cent as the dollar quoted at N1,510 on Thursday and Friday from N1,555 quoted last week Friday.
Rewane noted that while the new found stability of the naira should be treated with caution, the local currency has strengthened by nine per cent so far in 2025, maintaining its rally up from December after the CBN introduced some reforms to ensure efficiency in the market.
He highlighted that inflationary pressures are easing while signaling a bright side for the country’s gross domestic product (GDP) growth.
“On the bright side, the Nigerian naira has appreciated by nine per cent so far in 2025, inflation pressures are easing and GDP growth is positive. Petrol/diesel prices are cooling and the PMI is expanding,” he said.
“On the dark side, money supply is at 17 per cent which is very high, interest rates are elevated, borrowing costs are up, PoS and ATM fees are up and telecom and electricity tariffs are up,” Rewane stated.
On inflation, Rewane emphasised that there was no way prices could have reduced by over 10 per cent within such a short period.
While the rebased figures stood at 24.48 per cent for January 2025 up from 34.8 per cent last December, the real method carried out by the FDC team puts the inflation rate at 33.35 per cent.
“The man on the street does not believe that inflation has come down,” he declared.
Speaking at the 299th MPC meeting, Olayemi Cardoso, governor of the CBN said that admitting that inflation has fallen by over 10 percent after the rejigging of the consumer price index meant comparing “apple with oranges”.
“But we can see that inflation is gradually trending down”.
The MPC will be meeting on May 19 and 20 2025 after which three inflation data must have been released. This will then shape their policy direction whether to cut, hold or hike benchmark interest rates from its unchanged 27.5 per cent.
