The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says ongoing foreign exchange (FX) reforms have significantly boosted capital inflows, improved market liquidity and strengthened confidence in the Naira.
Cardoso disclosed this on Thursday in Lagos while delivering a distinguished alumni lecture at St. Gregory’s College during its Founder’s Day celebration.
He said the reforms were designed to eliminate distortions in the FX market, enhance transparency and restore stability to Nigeria’s financial system, noting that the measures are already delivering measurable results.
What the CBN boss is saying
Cardoso said the CBN’s policy actions have reshaped the FX market and reduced long-standing inefficiencies.
- “Through deliberate policy actions, we eliminated the system of multiple exchange rates and significantly reduced the parallel market premium from around 50 per cent in 2022 to less than two per cent on average in 2025.”
He said the FX market now operates with greater liquidity and efficiency, reducing the need for extraordinary interventions by the CBN.
He added that the bank has cleared the backlog of unmet foreign exchange demand that previously constrained businesses and investors.
According to him, investment flows into Nigeria increased by nearly 200 per cent between 2023 and 2025.
- Cardoso stated that the reforms have contributed to improved balance-of-payments conditions and stronger investor confidence, reflected in the recent growth in external reserves and relative stability in the FX market.
- He also noted that the CBN has returned to orthodox monetary policy, tightening measures to address inflation, which has declined from a peak of 34 per cent to about 15 per cent.
The governor emphasized that transparent markets and strong financial institutions remain critical foundations for sustainable economic growth.
Get up to speed
The FX reforms form part of broader macroeconomic adjustments implemented to address long-standing structural challenges in Nigeria’s foreign exchange market.
- For years, Nigeria operated a multiple exchange rate system that created arbitrage opportunities and market distortions. Cardoso said this framework benefited only a limited group of participants and undermined transparency.
The current reforms aim to unify the exchange rate system, improve price discovery and enhance market efficiency.
In addition to FX reforms, the CBN has tightened monetary policy to combat inflation and strengthen macroeconomic stability. These steps are intended to rebuild trust in financial markets and position the economy to better withstand global shocks, including geopolitical tensions and energy price volatility.
What you should know
Nigeria’s gross external reserves rose to $50.45 billion as of February 16, 2026, marking the highest level in 13 years.
- The parallel market premium has narrowed significantly.
- Inflation has declined from 34 per cent to about 15 per cent.
The apex bank attributed the improvement to robust accretion to foreign exchange reserves, supported by higher export earnings and increased remittance inflows.
