CBN committed to rooting out bad actors in Nigeria’s FX market — Cardoso
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has restated the apex bank’s dedication to cleansing the foreign exchange (FX) market by removing unscrupulous participants and ensuring a stable exchange rate as a foundation for economic recovery.
Cardoso made these remarks in his personal address at the February 2025 Monetary Policy Committee (MPC) meeting, underscoring the necessity of stringent regulatory oversight and transparency in Nigeria’s FX market.
A copy of the document was published on the bank’s website on Tuesday.
According to him, ensuring the efficient operation of the FX market is crucial for achieving price stability, controlling inflation, and sustaining the wider economy.
“We must sustain an elevated level of scrutiny in our foreign exchange market and eliminate any fraudulent actors and practices that undermine its efficiency and the stability of the exchange rate. The Central Bank remains steadfast in its commitment to this objective,” he stated.
Cardoso credited the increasing stability in the FX market to recent reforms introduced by the Bank, including the launch of the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code.
These initiatives, he explained, have improved transparency, enhanced investor confidence, and facilitated sustained liquidity through foreign investment inflows, export proceeds, and remittances.
The governor noted that these reforms have begun delivering tangible results—such as a stronger naira and a decline in speculative trading—contributing to a more market-driven price discovery process for the local currency.
He added that a greater share of FX demand is now directed through the official window, thereby minimising arbitrage opportunities between the Nigeria Foreign Exchange Market (NFEM) and the parallel market.
This has contributed to stabilising the naira and restoring confidence in the financial system.
While recognising the gradual decline in inflation following the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), Cardoso underscored that inflationary pressures remain a significant risk—particularly due to rising food prices and entrenched structural challenges.
According to the newly rebased data, headline inflation fell to 24.48% in January 2025, compared to 34.80% in December 2024 under the previous methodology.
However, Cardoso cautioned against viewing this as a definitive success, urging continued policy synchronisation to maintain a steady path of disinflation.
He stressed the necessity of cooperative efforts between monetary and fiscal authorities, citing the recently convened Monetary Policy Forum, where stakeholders pledged deeper coordination.
Cardoso’s statement also acknowledged broader macroeconomic improvements.
These include a positive current account balance, rising oil production at 1.54 million barrels per day, and external reserves of $39.4 billion as of mid-February 2025—equivalent to approximately 9.6 months of import cover.
These indicators, alongside stable interest rates and harmonised fiscal policies, suggest a gradual return to macroeconomic stability.
The CBN Governor reaffirmed the Bank’s determination to maintain its firm monetary policy stance while vigilantly monitoring potential risks.
He concluded by reiterating the Bank’s commitment to safeguarding recent progress in the FX market and the broader economy through a combination of policy consistency, rigorous oversight, and effective implementation of reforms.
