The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has announced a notable reduction in market volatility, attributing this positive development to the foreign exchange reforms implemented by the apex bank.
Cardoso made this announcement during a press briefing in Washington, USA, following discussions with stakeholders from the World Bank.
He explained that the bank’s bold and unconventional reforms have enhanced foreign exchange supply and increased remittance inflows into the country.
Additionally, he emphasized that the CBN has successfully curtailed arbitrage and speculative activities while eliminating the front-loading of foreign exchange demand.
“Since taking office a year ago, we’ve focused on addressing inflationary concerns, restoring investor confidence in financial markets, and stabilizing the exchange rate. Our goals include enhancing the financial system, fostering financial inclusion, and improving transparency in our monetary policy decisions and communications.
“We have undertaken bold and necessary reforms to return to a path of monetary policy orthodoxy and to eliminate observed distortions in the foreign exchange market. Our efforts have yielded significant progress, as volatility in the foreign exchange market has decreased markedly, and remittances have also increased substantially.
“We’ve achieved greater transparency and improved overall supply in the foreign exchange market, leading to reduced arbitrage, speculative activities, and the elimination of front-loading of foreign exchange demand,” Cardoso stated.
Bank Recapitalization Policy
Cardoso also addressed the CBN’s recapitalization policy for deposit money banks.
According to him, the initiative aims to support a N1 trillion economy by 2030.
However, he acknowledged that much work remains to be done, stressing the importance of maintaining and consolidating current progress through an efficient market system and deepening financial inclusion.
“The CBN recapitalization policy has prompted deposit money banks to strengthen their financial positions, a process expected to result in a more robust and resilient banking sector by March 2026. This exercise is designed to support the realization of the N1 trillion economy by 2030.
“We recognize that much more is needed to fully achieve our goals. Our path forward includes consolidating and enhancing current progress through an efficient market system and deepening financial and economic inclusion, particularly for small businesses, households, women, and young people in Nigeria.
“By leveraging smarter technology and remote banking solutions, we aim to reduce transaction costs and expand financial access, ensuring that every Nigerian, regardless of location or demographics, can meaningfully participate in our evolving financial system,” Cardoso added.
Since last year, Nigeria has faced currency fluctuations in the foreign exchange market, triggering widespread instability across all sectors of the economy.
At the height of the crisis, the naira depreciated to as low as N1,900/$ against the dollar earlier this year. However, the currency rebounded to approximately N1,600/$ in September, maintaining a range of around N1,650 with signs of stability.
In response, the CBN introduced several measures and directives to manage the currency, including crackdowns on the informal FX market, such as BDC operators, and the crypto market.
This month, the naira has shown relative stability against the dollar, accompanied by a significant rise in foreign exchange inflows into the reserves.