The Managing Director of Financial Derivatives Company, Bismarck Rewane, has expressed confidence in the Central Bank of Nigeria’s foreign exchange policies, stating that they are yielding positive results and aligning the naira closer to its fair value.
Rewane expressed his thoughts on the Global Business Report show on Arise TV on Monday.
The naira has been strengthening across the official and parallel markets in recent weeks. It closed Monday’s trading at 1503.63/$ at the Nigerian Foreign Exchange Market Window and 1,500.00/$ at the parallel market.
Rewane explained that a Purchasing Power Parity analysis placed the fair value of the naira at 1,102.15/$, meaning the currency is currently 26.35 per cent undervalued. He noted that while intervening to protect an overvalued currency can distort market forces, supporting an undervalued currency helps correct misalignment.