Bismarck Rewane, managing director of Financial Derivatives Co Limited and non-executive director of Parthian Partners as predicted a stronger Naira soon as inflation declines.
During the Parthian Partners 2024 Economic Outlook session in Lagos, he disclosed this.
“Inflation is likely to drop in 2024 and could go as low as 17% in 2025,” states Rewane. The exchange rate automatically rises when inflation starts to drop because the exchange rate pass-through slows down.
He did, however, point out that market reforms and ongoing currency volatility on the black market would cause inflation to rise early the following year. By the middle of the year, the base effects should start to show, with inflation decreasing from an average of 24.4 percent in 2023 to an average of 23.6 percent in 2024. Exchange rate appreciation will inevitably follow a drop in inflation, he stated.
Rewane also offered important viewpoints on the state of the economy, stressing developments, obstacles, and prospects for the coming year. As he examined economic trends, he pointed out that in 2023, the Naira would drop by 26% to N1,050/$.
“There were higher energy prices with diesel price up by 34.01 per cent to N1050 per litre (year-on-year), fuel price up by 233 per cent to N630 per litre (year-on-year), while money supply growth went up 36 per cent (year-on-year) to N67.18 trillion in September,” he said.
He examined important variables like GDP growth, inflation rates, and employment patterns to provide insight into the state of the economy.
He also emphasized foreign investment as a key factor that considerably boosts Nigeria’s GDP.
Rewane acknowledged the interdependence of the world economy and pointed out that Nigeria is surrounded by numerous foreign variables that could impact the direction of the country’s economic forecast for the upcoming year. This encompasses the evaluation of emerging market trends, trade dynamics, geopolitical events, and artificial intelligence ,AI.
Rewane acknowledged the interdependence of the world economy and pointed out that Nigeria is surrounded by numerous foreign variables that could impact the direction of the country’s economic forecast for the upcoming year. This encompasses the evaluation of emerging market trends, trade dynamics, geopolitical events, and artificial intelligence (AI).
He supported his claims with the following statement: “The world has changed; artificial intelligence and social media have made it easy,” even as he focused on AI and the quick changes the world is going through. Bank lines have disappeared since all you need is your app.
Investors are anticipated to increase their holdings in securities with higher yields and in businesses with strong cash flows and attainable profit targets, he continued.
He also emphasized a crucial point for investors. “Make sure indigenous people are investing in a country before you invest there,” he said.
The session was arranged by Parthian Partners as one of its value-added services for clients in an effort to give legislators, investors, and companies looking for strategic direction for the upcoming year a useful tool.
Additionally, Seun Dosunmu, Head of Research at Parthian Securities, a division of Parthian Partners, provided analysis of the stock market and identified trends that will recur in 2024.
He gave investors advice on what to anticipate, including high interest rates, the banking sector’s recapitalization, capital raising by a few listed companies, banking mergers and acquisitions, and potential increases in energy capacity.
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