Ismarck Rewane Discusses Nigeria’s Forex Market

Bismarck Rewane, the highly regarded CEO of Financial Derivatives Company, is well known for his expertise in economic analysis. His insights are frequently sought after by leading media platforms. However, as seen in recent events, his statements can sometimes be taken out of context or misrepresented, leading to public misinterpretation.

In a recent appearance on Channels Television, Rewane provided an in-depth assessment of the ongoing improvements in the Nigerian naira’s stability. Unfortunately, many newspapers presented selective interpretations of his statements, potentially misinforming their readers.

Media Misrepresentation and Selective Reporting

One of the headlines from a major publication read: “Naira’s Rally is Temporary, Don’t Get Carried Away—Rewane Warns.” The article quoted him as stating, “We’re seeing that the naira is strengthening but with caution. Let’s not be too hasty because it’s going to correct itself…” This was followed by details on Nigeria’s forex reserves and external borrowings.

Another publication on Monday ran a front-page story titled: “How FG Spent $8bn to Support Naira – Rewane.” The article claimed that the government had expended approximately $8 billion to stabilize the naira, attributing this statement to Rewane without adequate context.

To balance its report, the newspaper attempted to reach out to the Central Bank of Nigeria (CBN) spokesperson, Mrs. Hakama Sidi Ali, but was unsuccessful. Presidential Special Adviser Bayo Onanuga dismissed the claim, labeling it inaccurate.

CBN’s Commitment to Forex Stability

Despite media sensationalism, CBN’s forex policies under Governor Olayemi Cardoso have been instrumental in strengthening Nigeria’s financial sector. Since 2023, the central bank has initiated reforms aimed at:

Restoring order in the forex market
Enhancing the naira’s competitiveness
Boosting investor confidence

One of the most significant initiatives is the Nigeria Foreign Exchange Code (FX Code), designed to uphold transparency, fairness, and efficiency in forex transactions.

Rewane’s Clarification on Naira’s Valuation

Rewane, known for his data-driven approach, clarified his stance during an interview on Arise TV. He emphasized that the naira’s recent appreciation was not solely due to direct CBN interventions but rather a combination of policy-driven improvements.

His analysis highlighted key indicators such as:

Narrowing of the gap between official and parallel exchange rates
Efficient market price discovery
A positive trade balance of $18.6 billion
Declining money supply growth, now at $74 billion

Additionally, Rewane explained that the Purchasing Power Parity (PPP) analysis placed the naira’s fair value at ₦1,102.15/$, indicating a 26.35% undervaluation. While market interventions can distort an overvalued currency, supporting an undervalued one helps correct misalignment.

Strengthening Economic Policies for Sustainable Growth

Increased synergy between Nigeria’s monetary and fiscal authorities continues to drive economic stability. At the recent Monetary Policy Forum, organized by CBN, discussions centered on achieving price stability and long-term economic growth.

Rewane’s insights reinforce the importance of data-driven policy implementation. As Nigeria moves forward, CBN’s continuous efforts in forex management and financial reforms will play a crucial role in ensuring the naira’s stability and economic sustainability.

Conclusion

While media narratives can sometimes misrepresent statements, it is essential to rely on verified economic analyses. Rewane’s evaluation underscores that CBN’s forex policies are yielding positive outcomes, positioning the naira for long-term stability. As the financial landscape evolves, continued policy refinement will be key to maintaining economic resilience.