Economist and CEO of Financial Derivatives Company, Bismarck Rewane, supports the Central Bank of Nigeria’s (CBN) recent decision to inject $8 billion into the foreign exchange market to stabilize the naira. He describes the move as a necessary step to address the currency’s undervaluation and strengthen market confidence.
Speaking during an interview on Arise TV’s Global Business Report, Rewane highlights the positive effects of the CBN’s policies on Nigeria’s forex market. He notes that the gap between the official and parallel market exchange rates has narrowed to less than 1%, compared to previous disparities of 10–20%. He also points out that Nigeria’s balance of trade now stands at $18.6 billion, marking its highest level in recent years.
Global Context for Currency Defense Measures
Rewane compares Nigeria’s efforts to interventions by other countries. He cites the UK’s $27 billion defense of the British pound in the 1990s, China’s $1.2 trillion currency intervention between 2015 and 2016, Russia’s $80.5 billion spent from 2014 to 2015, and Switzerland’s $480 billion commitment to stabilize its currency.
He explains that Nigeria’s $8 billion intervention is comparatively small but necessary to protect an undervalued currency. “If the government supports an undervalued currency, it brings it back in line with its fair market value. This is a responsible and effective strategy,” Rewane says.
Justifying the CBN’s Intervention
According to Rewane, the CBN’s role is to stabilize and protect the naira’s value in the face of economic pressures. He cites a Purchasing Power Parity (PPP) analysis, which places the fair value of the naira at ₦1,102.15 per dollar, suggesting the currency is undervalued by 26.35%.
“Supporting an overvalued currency is harmful, but intervening when a currency is undervalued helps correct market imbalances,” Rewane states. “The CBN’s actions aim to realign the naira with its true value.”
Market Stability Takes Priority Over Value
Rewane stresses that stability, rather than value alone, is what matters most to investors. He recalls how, at the same time last year, the CBN increased interest rates by 400 basis points—a move that contributed to the naira’s appreciation from ₦1,900 to ₦1,200 per dollar.
However, he notes that earlier interventions lacked a clear schedule or framework, which is essential for effective long-term market stabilization. “Investors prioritize stable markets. When the CBN intervenes to create that stability, it fulfills its responsibility effectively,” he adds.
Rewane also addresses the spread of misinformation about the CBN’s interventions, urging Nigerians to assess the outcomes rather than relying on speculation.
“The real question is whether these policies are working for the overall good of the economy,” he concludes. “From what we are seeing so far, the interventions appear to be yielding positive results.”
 recent decision to inject $8 billion into the foreign exchange market to stabilize the naira. He describes the move as a necessary step to address the currency’s undervaluation and strengthen market confidence.){kind=link}