Economic analysts have projected that the Nigerian naira is likely to stabilise within the range of N1,600 to N1,650 per dollar in the short term, as ongoing reforms and market trends begin to yield positive effects.

Renowned economist and Managing Director of Financial Derivatives Limited, Bismarck Rewane, shared this outlook at the June edition of the Lagos Business School Breakfast Session. He noted that although the naira is currently undervalued by approximately 26.82%, it is gradually aligning with its fair market value.

According to Rewane, recent reforms have improved the convergence of exchange rates across the official and parallel markets, reducing speculative pressures and narrowing the rate disparity to within a N50 margin—an improvement from the previous 50–70% gap.

“The naira is approaching fair value, with the spread now within a N50 range,” he explained. He predicts that the exchange rate will stabilise between N1,600 and N1,650, driven by improved market fundamentals.

In his economic outlook, Rewane forecasted a modest decline in inflation to 23.15% by Q1 2025, alongside a projected GDP growth rate of 3.4%. He also expects Brent crude prices to trade between $60 and $63 per barrel, with increased production from OPEC+ contributing to this trend.

On the domestic front, Nigeria’s oil output is expected to climb to 1.5 million barrels per day, while petrol and diesel prices may drop to N845/litre and N950/litre respectively. Additionally, he anticipates a 50 basis points reduction in the Monetary Policy Rate by the Central Bank’s Monetary Policy Committee.

Supporting this outlook, analysts at Meristem also projected short-term stability for the naira, barring any major disruptions in foreign exchange supply or speculative surges. In their May report, they highlighted that while the naira gained in the official market, it weakened in the parallel market, widening the spread from N1.69/$ in April to N24.25/$ in May—its first significant divergence since March.

Persistent demand pressures, speculative trading, and global economic volatility were identified as key contributors to this fluctuation.

Rewane also reported strong performance in the corporate sector, particularly among firms relying on local inputs and domestic credit. He highlighted increased issuance of commercial papers, attractive yields, and greater foreign exchange transparency as factors bolstering investor confidence, especially in banking, infrastructure, and energy sectors.

Similarly, analysts at Cordros Capital attributed the naira’s recent gains to higher foreign portfolio inflows, supported by easing global conditions and proactive interventions by the Central Bank of Nigeria. They echoed expectations of near-term exchange rate stability, fueled by revived interest in Nigeria’s capital markets and continued policy reforms.

Despite the naira closing at N1,553.12/$ on Thursday, June 5, 2025, at the Nigerian Autonomous Foreign Exchange Market (NAFEM), experts remain optimistic. Central Bank data shows a 2.3% appreciation from N1,579.27/$ earlier in the week, indicating rising confidence in Nigeria’s FX market. The currency also strengthened from the previous day's rate of N1,565.46/$.