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  • Senate hails CBN over falling inflation, forex stability

    Senate hails CBN over falling inflation, forex stability

    The Senate on Thursday commended the Central Bank of Nigeria (CBN) for what it described as a remarkable turnaround in key macroeconomic indicators, including sustained disinflation, exchange rate stability, rising external reserves, and renewed investor confidence. 

    Lawmakers also welcomed the Bank’s positive projections for 2026, noting that Nigeria’s economic fundamentals have strengthened significantly under ongoing monetary and structural reforms.

    The commendation came during the second statutory engagement of the year between the Senate Committee on Banking, Insurance and Other Financial Institutions and the apex bank, held in Abuja.

    Chairman of the committee, Senator Mukhail Adetokunbo Abiru (APC-Lagos East), in his opening remarks, before the meeting went into closed-door session, said recent economic data show that the CBN’s reforms are yielding tangible results, with inflation declining steadily from its peak and the naira maintaining stability across markets.

    Abiru praised the CBN for steering inflation down to about 16 per cent as of October 2025, a sharp drop from the pressures of the past two years.

    He said the stability in the foreign exchange market, convergence of rates, and improved liquidity have strengthened business planning and boosted investor confidence.

    He also highlighted the steady growth in external reserves, now above $46.7 billion, which he said provides “stronger buffers against external shocks and reinforces Nigeria’s creditworthiness.”

    The Senator further commended the apex bank for its role in securing improved sovereign ratings from global agencies Fitch and S&P.

    On monetary policy, Abiru noted the CBN’s decision to retain the Monetary Policy Rate (MPR) at 27 per cent while adjusting the standing facility corridor, saying it reflects a delicate balance between anchoring inflation expectations and supporting credit expansion.

    But the Committee Chairman also raised issues requiring clarification, including the 2026 timeline for banking sector recapitalisation, the clearing of outstanding FX forwards, and lingering concerns about mutilated naira notes, excessive bank charges, cyber risks in the digital finance space, and the controversial Auditor-General’s report on unremitted operating surplus allegedly involving N1.44 trillion.

    Responding, CBN Governor Dr. Olayemi Cardoso delivered a detailed report on macroeconomic performance in the second half of 2025 and the outlook for 2026, affirming that Nigeria’s economic recovery is firm and broad-based.

    Cardoso said despite global headwinds, ranging from geopolitical tensions to fluctuations in oil prices, Nigeria has “consolidated macroeconomic stability, strengthened financial markets, and improved monetary policy effectiveness.”

    He stated that the Bank’s inflation-targeting transition, tighter monetary stance, and FX market reforms have restored credibility to monetary policy.

    According to him, real GDP grew by 3.98 per cent in the third quarter of 2025, driven by crop production, ICT, real estate, and financial services, while the Purchasing Managers’ Index reached 56.4 points in November, its highest level in five years, indicating stronger output growth.

    On inflation, Cardoso reported that headline inflation has fallen for seven consecutive months, down from 34.6 per cent in November 2024 to 16.05 per cent in October 2025, the lowest in three years.

    Food inflation, he said, has also dropped significantly to 13.12 per cent, easing pressure on household consumption and business operations.

    The Governor emphasised that the benefits of the CBN’s reforms are most evident in the foreign exchange market, where stability has returned, and arbitrage opportunities have largely disappeared.

    He said the gap between the official and parallel market rates has narrowed to under 2 per cent, compared to over 60 per cent a year ago.

    “As of November 26, the naira traded at N1,442.92/$ at the Nigerian Foreign Exchange Market, an improvement from the first-half average.

    “Foreign reserves have surged to $46.7 billion, the highest in almost seven years, while diaspora remittances have risen by 66.7 per cent to about $600 million per month,” he said.

    Perhaps the most significant achievement, he noted, was the clearance of the $7 billion FX backlog, which has restored investor confidence and catalysed foreign capital inflows.

    Nigeria recorded $20.98 billion in capital inflows in the first 10 months of 2025—a 70 per cent increase over the entire 2024 figure and a 428 per cent jump from 2023.

    Cardoso also confirmed strong gains in the external sector, including an 85 per cent improvement in the current account balance and a dramatic narrowing of the balance of payments deficit by over 90 per cent in Q2 2025.

    On the financial system, he said the banking recapitalisation programme is “firmly on track,” with 27 banks raising capital and 16 already meeting or exceeding the new thresholds ahead of the March 31, 2026, deadline. The stock market, he added, has surged by 19 per cent between June and November due to renewed investor confidence.

    He also highlighted advances in digital finance, including the extension of the Payment System Vision Roadmap to 2028, the rollout of over 12 million contactless cards, the expansion of the regulatory sandbox to 40 fintechs, and progress in interoperability and cybersecurity.

    Looking ahead, Cardoso declared that “the outlook for 2026 is positive.”

    He projected further moderation in inflation, sustained exchange-rate stability, stronger banking-sector resilience, and continued reforms to bolster payment infrastructure, liquidity management, and prudential oversight.

    The CBN, he assured the Senate, will remain vigilant amid global uncertainties but is confident that Nigeria’s strengthened economic foundations will mitigate risks and sustain recovery.

    With both arms of government aligned on economic direction, the Senate expressed optimism that the reforms will deliver lasting stability, growth, and improved living standards for Nigerians.

  • CBN removes deposit limits, raises withdrawal thresholds

    CBN removes deposit limits, raises withdrawal thresholds

    The Central Bank of Nigeria (CBN) has introduced major changes to Nigeria’s cash management framework, removing all limits on cash deposits and increasing weekly withdrawal thresholds for individuals and corporate bodies.

    The new directives, issued in a circular released by the apex bank, will take effect from January 1, 2026.

    According to the CBN, the decision to overhaul its cash-related policies is driven by the need to reduce the rising cost of managing physical currency, bolster security around cash movements, and curb money laundering by encouraging greater use of electronic payment channels.

    In the circular, the CBN confirmed that “the cumulative limit on cash deposits is entirely removed, and the associated fee for excess deposits will no longer apply.”

    The bank said this change is intended to ease the burden on individuals and businesses who operate cash-heavy activities, while also improving liquidity within the banking system.

    Under the revised framework, weekly withdrawal limits across all channels—Over-the-Counter (OTC), Automated Teller Machines (ATMs), and Point of Sale (PoS) terminals—have been pegged at N500,000 for individuals and N5 million for corporate entities. While banks must adhere to these thresholds, the CBN noted that withdrawals exceeding the limits will attract processing fees of 3 percent for individuals and 5 percent for corporate customers.

    The circular clarified that daily ATM withdrawals remain capped at N100,000 per customer but must still fall within the overall weekly ceiling of N500,000 for individuals. It also announced the end of the special authorization that previously allowed individuals to withdraw N5 million once a month and corporate bodies N10 million once a month.

    In another adjustment, banks are now permitted to load all denominations of the naira in their ATMs, removing earlier restrictions that limited ATM cassettes to smaller notes.

    Read Also: CBN redesigns credit-risk policy to protect N4.14tr new capital

    The CBN also provided details on the sharing formula for the revenue generated from excess cash withdrawal fees. The circular states that 40 percent of such revenue will accrue to the CBN, while 60 percent will go to the bank or financial institution that processed the transaction.

    Other components of the new cash policy were also clarified. The apex bank maintained the N100,000 over-the-counter limit for third-party cheque encashments, noting that any withdrawal through this channel will count toward the weekly withdrawal limit.

    Deposit Money Banks (DMBs) and other financial institutions are additionally required to submit monthly reports detailing cash withdrawal transactions above the set limits and all cash deposit activities. To ensure transparency, banks must create dedicated internal ledger accounts to warehouse charges collected from excess withdrawals.

    The circular also provided clarity on exemptions. Accounts belonging to the federal, state, and local governments, as well as accounts of microfinance banks and primary mortgage banks maintained with commercial and non-interest banks, will not be bound by the weekly withdrawal limits or the associated excess withdrawal fees.

    However, the CBN confirmed that foreign embassies, diplomatic missions, and donor agencies would no longer enjoy exemptions previously granted under the old cash policy.

    Describing the directive as mandatory, the CBN instructed all deposit-taking financial institutions in Nigeria to immediately begin preparations for full implementation on January 1, 2026.

    The apex bank said the reforms are part of a broader effort to strengthen the efficiency of Nigeria’s financial system and to strike a balance between cash usage and digital payments in the country’s evolving economy.

  • ‘CBN’s new policy decision sanction for banks not lending to businesses’

    ‘CBN’s new policy decision sanction for banks not lending to businesses’

    The Central Bank of Nigeria (CBN’s) decision adjusting the Standing Facility corridor around the Monetary Policy Rate (MPR) at +50/-450 basis points, represents sanction against banks not keen on lending to real sector.

    By adjusting the Standing Facility corridor around the MPR from +250/-250 basis points to +50/-450 basis points, banks taking excess deposits to CBN instead of lending to businesses, will now be paid 450 basis points below the 27 per cent benchmark interest rate.

    The Monetary Policy Committee (MPC’s) decision was underpinned by the need to sustain the progress made so far towards achieving low and stable inflation. The MPC reaffirmed its commitment to a data-driven assessment of developments and outlook to guide future policy decisions.

    Managing Director, Financial Derivatives Company (FDC) Limited, Bismarck Rewane, said that by reducing the amount CBN pays to banks taking idle funds to its vaults, the apex bank will accelerate lending.

    According to him, for the MPC to adjust the asymmetric corridor, means that the apex bank will not be paying much to banks for keeping money idle at the central bank, which is the key thing.

    Rewane explained that the CBN’s decision, which signals positive yields on short-term assets, will continue to strengthen portfolio capital inflows, support the naira, and reinforce the disinflation path.

    He said: “The MPC’s decision also reflects current global trends emphasizing central bank autonomy and independence, as seen in most advanced economies,” he said.

    “The next MPC meeting is in February 2026. In the coming 90 days, a cautious “wait-and-see” approach is expected, with T-bill rates and debt management policies under close scrutiny. The naira will likely trade in a range of N1,450–N1,500/$ in the near term, while GDP growth is projected at 3.9 per cent in 2025 and 4.2 per cent in 2026. However, 2026 presents key risks of imponderables and exogenous shocks, including a likely fall in the price of Brent to $55pb”.

    Other analysts said that Monetary Policy is always conducted by influencing monetary and credit conditions to achieve set macroeconomic goals, and by adjusting the Standing Facility corridor around the MPR, the intension is to boost lending to the domestic economy.

    The CBN’s money and credit statistics showed that credit to private sector stood at N74.41 trillion credit in October 2025, representing improvement from N72.53 trillion in September, an increase of about N1.88 trillion.

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    It represented the strongest positive movement so far in 2025.

    On a year-on-year basis, credit to the private sector increased only slightly, from N74.07 trillion in October 2024 to N74.41 trillion in October.

    The modest annual gain shows that while the stock of private credit is broadly back to where it was a year earlier, the real story is the short-term rebound that followed the September rate cut.

    CBN Governor, Olayemi Cardoso said MSMEs remain central to our efforts. This year alone, microfinance lending expanded by over 14 per cent, and new digital-credit products reached more than 1.2 million small enterprises — evidence of the sector’s growing depth and capacity. We are improving access to credit, supporting microfinance institutions, and expanding financial products tailored to smaller enterprises.

     “The Central Bank of Nigeria will continue to steer monetary policy with discipline, anchored firmly to its core mandate of price stability. Stability remains the bedrock upon which investment flourishes, resources are allocated efficiently, and purchasing power is protected. In 2026, we will deepen engagement with stakeholders, strengthen collaboration with other regulators and international partners, and foster responsible innovation across the financial system,” he said.

  • CBN reports N74.41tr credit to private sector in one month

    CBN reports N74.41tr credit to private sector in one month

    The Central Bank of Nigeria (CBN) has reported N74.41 trillion  credit to the private sector in October 2025, its money and credit statistics, has shown.

    The figure represents improvement from N72.53 trillion in September, and an increase of about N1.88 trillion represents a month-on-month growth .

    It represents the strongest positive movement so far in 2025.

    The jump came immediately after the Monetary Policy Committee (MPC) cut the Monetary Policy Rate (MPR) by 50 basis points to 27 per cent at its September 2025 meeting, the first policy rate reduction since 2020, as inflation began to ease and foreign exchange conditions improved.

    At its November 2025 meeting, the MPC then held the MPR at 27 per cent, while tweaking the corridor around the rate to discourage banks from simply parking liquidity with the CBN, signaling a cautious approach to managing system liquidity and inflation.

    On a year-on-year basis, credit to the private sector increased only slightly, from N74.07 trillion in October 2024 to N74.41 trillion in October 2025.

    The modest annual gain shows that while the stock of private credit is broadly back to where it was a year earlier, the real story is the short-term rebound that followed the September rate cut.

    Across 2025, the pattern of private sector credit has been choppy rather than steadily expansionary. It started the year at N77.38 trillion in January, slipped to N76.26 trillion in February and N75.98 trillion in March, then recovered to N78.07 trillion in April.

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    It softened again to N77.97 trillion in May and N76.13 trillion in June, hovered around N75.88 trillion in August, then dropped sharply to N72.53 trillion in September before the October bounce to N74.41 trillion.

    Between January and February, private credit fell by about N1.12 trillion, a decline of 1.45 per cent. It dipped again in March, although by a much smaller N0.28 trillion, or 0.36 per cent. April then delivered a strong rebound, with credit rising by about N2.09 trillion or 2.75 per cent, pushing the stock back above N78 trillion.

    From April to June, the direction turned down again. Credit fell slightly in May, then more sharply in June, losing about N1.84 trillion between May and June. By June, private credit stood at N76.13 trillion, below January’s level despite rising prices and nominal incomes.

    There is a gap in the series for July, but by August, private credit was N75.88 trillion, only marginally below June. The more notable movement came in September, when credit dropped by about N3.36 trillion from August, a fall of 4.42 per cent. That slump set the stage for the October recovery.

    In October, the private sector accounted for about 75.0 per cent of total domestic credit, with the government taking up the remaining 25 per cent.

    The split is calculated from the N74.41 trillion in private credit and N24.79 trillion in government credit relative to total domestic credit of N99.20 trillion. In September, the shares were almost identical, with the private sector at about 75.0 per cent and government at 25 per cent.

    This composition has shifted notably compared with a year earlier. In October 2024, total domestic credit stood at N113.46 trillion, of which N74.07 trillion went to the private sector and N39.39 trillion to government.

    That meant private credit represented about 65.3 per cent of domestic credit, while government borrowing made up 34.7%. By October 2025, the private share had risen by almost 10 percentage points, driven mainly by the steep fall in government credit.

  • CBN: 16 banks meet new capital requirements

    CBN: 16 banks meet new capital requirements

    The Central Bank of Nigeria (CBN) yesterday affirmed that 16 banks have so far met the new capital requirements for their various licences, some four months to the March 31, 2026 deadline.

    The apex bank also indicated that 27 other banks have raised capital through various methods in one of the most extensive financial sector reforms since 2004.

    Addressing journalists yesterday at the end of the Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor, Mr Olayemi Cardoso said the banking recapitalisation was going on orderly, consistent with the regulator’s expectations.

    He said: “We are monitoring developments, and indications show the process is moving in the right direction”.

    Nigeria has 44 deposit-taking banks, including seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.

    Cardoso explained that eight commercial banks had met the N500 billion capital requirement as of July 22, 2024, rising to 14 by September of the same year. The number has now increased to 16 as the industry continues to race toward full compliance.

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    He reiterated that the reforms would reinforce the resilience of Nigerian banks both within the country and across the continent.

    “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” Cardoso said.

    According to him, the reforms would strengthen the financial sector’s capability to support households and businesses.

    He said: “Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalisation”.

    He added that the apex bank considered several factors in determining the new capital thresholds, including prevailing macroeconomic conditions, stress test results and the need for stronger risk buffers.

    He reassured on the regulator’s commitment to strict oversight as the consolidation progresses.

    “We will rigorously enforce our ‘fit and proper’ criteria for prospective new shareholders, senior management, and board members of banks, and proactively monitor the integrity of financial statements, adequacy of financial resources, and fair valuation of banks’ post-merger balance sheets,” Cardoso said.

    He said the CBN remained confident that the banking system would emerge stronger at the conclusion of the recapitalization exercise, with institutions better prepared to support Nigeria’s economic transformation

    Banks have up till March 31, 2026 to beef up their minimum capital base to the new standard set by the apex bank.

    Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds.

    While most banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition.

    The CBN had in March 2024 released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion.

    Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026. 

    Under the guidelines for the recapitalisation exercise, banks are expected to subject their new equity funds for capital verification, before the clearance of the allotment proposal and release of the funds to the bank for onward completion of the offer process and addition of the new capital to its capital base.

    The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation exercise.

  • 16 banks have met new capital requirements, says CBN

    16 banks have met new capital requirements, says CBN

    The Central Bank of Nigeria (CBN) said the bank recapitalisation exercise is progressing steadily, with 16 banks already meeting the new capital requirements ahead of the March 31, 2026 deadline. Another 27 banks have also raised capital through various channels as the sector moves toward one of the most extensive reforms since 2004.

    Governor Olayemi Cardoso disclosed the development on Tuesday in Abuja while briefing journalists at the end of the Monetary Policy Committee (MPC) meeting. He described the exercise as orderly and consistent with the regulator’s expectations.

    “We are monitoring developments, and indications show the process is moving in the right direction,” he said.

    As of April 2025, Nigeria had 44 deposit-taking banks, including seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.

    Under the recapitalization framework issued by the CBN, banks must raise their paid-in share capital to levels proportionate to the scope of their operations. International commercial banks are required to attain N500 billion, national commercial banks must reach N200 billion, and regional commercial banks N50 billion.

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     For non-interest banks, the minimum is N20 billion for national operations and N10 billion for regional operations, while merchant banks with national authorisation must meet N50 billion. The apex bank has also made clear that only paid-up capital and share premium qualify toward the new thresholds, excluding reserves and retained earnings.

    Cardoso said the reforms would reinforce the resilience of Nigerian banks both within the country and across the continent. “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. 

    These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” he said.

    He added that the reforms would strengthen the financial sector’s support for households and businesses. 

    Aw“Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalization.”

    Cardoso recalled that the CBN had earlier outlined the broader objectives of the programme, noting that the Bank’s Deputy Governor for Financial Systems Stability, Phillip Ikeazor, had restated the significance of the exercise during a stakeholder session at the UK-Nigerian Chamber of Commerce. Ikeazor said the apex bank was committed to building stronger, healthier and more resilient banks capable of supporting the government’s ambition of achieving a US$1 trillion economy by 2030.

    According to Ikeazor’s presentation, the recapitalization programme is expected to expand banks’ lending capacity, attract more foreign direct investment, and increase foreign exchange liquidity. He also noted that the reforms would contribute to GDP growth, enhance risk management practices, strengthen credit ratings, broaden ownership structures, improve governance, and boost market value and activity in the equity market.

    “With the recapitalisation programme, our goal is to trigger the emergence of stronger, healthier and more resilient banks,” Ikeazor said.

    Cardoso added that the apex bank considered several factors in determining the new capital thresholds, including prevailing macroeconomic conditions, stress test results and the need for stronger risk buffers. 

    He also affirmed the regulator’s commitment to strict oversight as consolidation progresses. “We will rigorously enforce our ‘fit and proper’ criteria for prospective new shareholders, senior management, and board members of banks, and proactively monitor the integrity of financial statements, adequacy of financial resources, and fair valuation of banks’ post-merger balance sheets,” he said.

    The governor recalled that eight commercial banks had met the N500 billion capital requirement as of July 22, 2024, rising to 14 by September of the same year. The number has now increased to 16 as the industry continues to race toward full compliance.

    Cardoso said the CBN remained confident that the banking system would emerge stronger at the conclusion of the recapitalization exercise, with institutions better prepared to support Nigeria’s economic transformation.

  • 16 banks fully comply with recapitalisation requirements – CBN

    16 banks fully comply with recapitalisation requirements – CBN

    • …CBN retains monetary policy rate

    The Central Bank of Nigeria (CBN) has confirmed significant progress in the ongoing bank recapitalisation programme, with Governor Olayemi Cardoso announcing that sixteen banks have already met the new capital requirements, while another twenty-seven have raised capital through various means. 

    Speaking at the end of the Monetary Policy Committee (MPC) meeting on Tuesday in Abuja, Cardoso said the exercise was unfolding smoothly and in line with expectations.

    “We are monitoring developments, and indications show the process is moving in the right direction,” he told journalists. 

    As at April 2025, Nigeria had 44 deposit-taking banks comprising seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.

    Cardoso said the recapitalization drive would strengthen banks operating within and outside Nigeria. “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” he said.

    He added that the benefits would be felt broadly across the economy. “Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalization.”

    Announcing the outcome of the MPC meeting, Cardoso said all 12 members were in attendance and they all voted to retain the monetary policy rate at 27 per cent, adjust the standing facility corridor around the MPR to +50/-450 basis points, maintain the cash reserve requirement for deposit money banks at 45 per cent, keep merchant banks’ CRR at 16 per cent, apply a 75 per cent CRR on non-TSA public sector deposits, and leave the liquidity ratio unchanged at 30 per cent.

    He said the decisions were driven by the need “to sustain the progress made so far towards achieving low and stable inflation,” noting that the committee remained committed to a data-driven approach in guiding future decisions.

    On the country’s $46.7 billion foreign reserves, the CBN Governor said Nigeria was in a strong position. “On reserve adequacy, we currently have about 10 months of import cover, which is a very good position. In fact, the underlying strength is even greater, as there is significant liquidity within the market that may not be immediately obvious.”

    Cardoso attributed the improvement to stronger non-oil exports, better oil production, rising remittances and renewed portfolio investment. “A more competitive currency encourages exports, and we are seeing this especially in non-oil exports. Oil production has also improved compared with where we were previously,” he said.

    “International remittances have risen as well. The important thing is that reserves are being built in a systemic and sustainable way. Portfolio investors are returning because reforms have made Nigeria more attractive, and the market is now more open and transparent.”

    Cardoso said the broader economy was stabilizing after a period of volatility. “The macro indicators are looking a lot better, and inflation has come down steadily. This time last year it was over 34 percent, and now we are around 16 percent”

    He noted that stability was essential for long-term growth. “A year and a half or two years ago, there was a lot of instability in our markets. When markets are unstable, investors who would normally invest stay away. Now we have moved from instability to stability. After stability comes investment, and after investment comes growth.”

    He said recent quarterly growth figures already reflected the shift in sentiment. “If you look closely, you will see that growth has returned over the last couple of quarters. With stability now achieved, investor confidence rises, investment follows, and the issues you mentioned become easier to address.”

    The governor defended the CBN’s decision to halt direct lending interventions, saying past programmes were unsustainable. “We did a study of past CBN interventions and found that total interventions amounted to about N10.93 trillion over many years. Out of this, N4.69 trillion—about 43 percent—is still outstanding. Since we came in, we have been able to recover about N2 trillion, but the remaining amount is still very large.”

    He argued that the large outstanding exposure made further interventions imprudent. “We cannot embark on new interventions without risking further distortions. Excessive interventions in the past contributed to economic instability.”

    Cardoso said the new model—where the CBN acts as a catalyst—is already proving more sustainable. “In the past, central-bank interventions discouraged commercial players—who could not compete with subsidised CBN rates—from innovating or developing new products. There was also a moral hazard problem: loans were taken as if they did not need to be repaid.”

    He said the new approach would support development finance through market-driven channels. “We are supporting others to make meaningful impact, but in a responsible, sustainable and market-driven way. With proper structure, we believe this approach will ultimately unlock more development finance than past interventions did.”

    The CBN Governor described Nigeria’s removal from the Financial Action Task Force (FATF) grey list as a major milestone. “The Central Bank, NFIU, SEC, EFCC, the Ministry of Finance and all the security agencies worked with incredible unity. This was specially acknowledged by the FATF team. The Vice-President himself attended and chaired the session, demonstrating strong national commitment.”

    He said the challenge now was staying compliant. “We were not on the grey list three years ago, so certain things happened that pushed us into it. Now that we are off it, everything must be done to ensure we do not slip back.”

    He explained that the exit would strengthen cross-border banking relationships. “When you are on the grey list, correspondent banks become cautious; once you exit, they are far more willing to deal with Nigerian banks, and pricing becomes more competitive.”

    Addressing concerns about the sustainability of the steadier foreign-exchange market, Cardoso insisted that the gains were driven by genuine market activity. “We now run a system of willing buyers and willing sellers. People buy and sell freely, and the process is open and transparent. Our NFEM system allows everyone to see who is buying and who is selling.”

    According to him, average daily turnover has reached $500 million, often without CBN intervention. “In the past, if the CBN did not intervene, nothing happened. That era is gone.”

    He said transparency and consistency had restored market confidence. “The spread has narrowed from about 60 percent when we began reforms, to around 2 percent today.”

    Cardoso noted that Nigerians were already enjoying the benefits. “Travellers are witnessing the benefits. The fear and uncertainty that once characterized the market have disappeared. Nigerians can travel and pay with their naira cards without the anxiety that once existed. Nigerians are increasingly proud to hold the naira—and that is a very positive development.”

  • CBN places ban on dud cheque issuers

    CBN places ban on dud cheque issuers

    Central Bank of Nigeria (CBN) has approved five-year outright ban for serial dud cheque issuers. The culprits will be stopped from accessing the clearing system, credit and opening new accounts in the financial system within the five-year period.

    The directive was issued yesterday in a circular to all banks and other financial institutions.

    Director, Financial Policy and Regulation Department, Central Bank of Nigeria (CBN), Dr. Rita Sike, said the apex bank exercised its powers under the CBN Act, 2007 (CBN Act), the Banks and Other Financial Institutions Act (BOFIA), 2020, and other applicable laws.

    The draft guideline described  a cheque that is dishonoured only on grounds of insufficient funds in the drawers’ account remains a dud cheque while serial dud cheque issuer is a customer that has issued a dud cheque three times in the banking system.

    Among other provisions, the draft guidelines seeks to enhance clarity and offer further guidance to banks and other financial institutions on the handling of dud cheques, regulatory requirements for reporting and barring their issuers, the processes for updating and unbarring issuers of dud cheques, and the associated penalties for non-compliance.

    The circular stated that first offender for returned cheque charge, will pay fee in line with the provisions of the Guide to Charges by Banks, Other Financial and Non-Bank Financial Institutions.

    They advised bank customers to ensure that cheques are issued on accounts that are adequately funded, as issuance of cheques on accounts with insufficient funds constitutes breach of the guidelines.

    For Commercial, Merchant, and Non-Interest Banks that issued dud cheque attracts a minimum penalty of N2,000,000 per infraction while Primary Mortgage /Microfinance Banks defaulters will pay a minimum penalty per infraction: a. N1,000,000 – PMBs (state and national) and National MfBs, N500,000 – State MfBs, N250,000 – Tier 1 Unit MfBs and N100,000 – Tier 2 Unit MfBs.

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    The CBN directed that the bank ensures the customer qualifies as a dud cheque issuer before reporting to CBN while failure to carry out necessary checks to ensure that the customer qualifies as a dud cheque issuer also constitutes an offence.

    The CBN said that the guidelines were to deter customers from issuing dud cheques by establishing procedures for the treatment of dud cheques with defined sanctions and penalties.

    It was also meant to promote integrity and confidence in the use of cheques as a reliable means of payment, streamline the process for identifying dud cheque issuers, reporting them to CBN and Private Credit Bureaux, and blacklisting serial dud cheque issuers and identify the stakeholders and specify their roles and responsibilities in managing and resolving dud cheque issues.

    The guidelines will also help to strengthen dispute resolution mechanisms for issues involving dud cheques between customers and financial institutions and promote compliance and accountability in reporting and managing dud cheques issues.

  • $46bn reserves, falling inflation signal CBN policy impact

    $46bn reserves, falling inflation signal CBN policy impact

    Nigeria’s inflation rate continues to cool, slipping to 16.05 per cent in October from 18.02 per cent in September 2025 — a trend economists say reflects the impact of sustained monetary policy easing and far-reaching reforms by the Central Bank of Nigeria (CBN). The easing cycle has strengthened FX stability, boosted foreign reserves to $46 billion, and reinforced confidence in the macroeconomic environment. CBN Governor Olayemi Cardoso has consistently highlighted how recent policy decisions have made the naira more competitive and improved Nigeria’s investment climate for global investors, reports Assistant Editor COLLINS NWEZE

    The Central Bank of Nigeria (CBN) says ongoing policy easing and structural reforms are steadily filtering into the wider economy, helping to stabilise the naira, ease lending rates, and support the continued moderation of inflation. According to the bank, its recent monetary policy actions reflect a deliberate strategy to restore macroeconomic stability after years of fiscal and external pressures. It added that lower lending rates are emerging as one of the most visible outcomes of its policy trajectory, underscoring the leadership’s commitment to strengthening the financial system.

    The CBN noted that close alignment between fiscal and monetary policies has become indispensable at a time when technological innovation and digital finance are rapidly transforming the financial landscape. This coordination, it said, has enhanced the effectiveness of monetary tools and improved the transmission of policy decisions across sectors. At its 302nd meeting held on September 22 and 23, 2025, the Monetary Policy Committee (MPC) trimmed the benchmark interest rate by 50 basis points — from 27.5 per cent to 27 per cent. The move, the first rate cut since the tightening cycle began, signals a shift in policy direction as inflationary pressures begin to ease. The committee said the decision balances the need to support growth while maintaining stability in the foreign exchange market.

    Early data appears to validate this stance. The National Bureau of Statistics (NBS), in its October 2025 Consumer Price Index (CPI) report, revealed that inflation fell to 16.05 per cent from 18.02 per cent in September. It added that on a year-on-year basis, the October 2025 headline inflation rate was 17.82 per cent lower than the 33.88 per cent recorded in October 2024 — a significant moderation despite differences in the CPI base year.

     However, the NBS noted some upward movement on a month-on-month basis. The October 2025 inflation rate stood at 0.93 per cent, slightly higher than the 0.72 per cent recorded in September. This indicates that although prices continued to rise, the pace of increase was modest and broadly consistent with overall disinflation trends observed in the past months. Beyond inflation, other indicators are also pointing in a positive direction. The gradual strengthening of the naira, coupled with rising foreign reserves, suggests an improving economic outlook. These gains have contributed to renewed investor confidence and better stability in the foreign exchange (FX) markets.

    Reflecting this trend, the International Monetary Fund (IMF) has projected a 3.9 per cent growth rate for Nigeria in 2025, citing ongoing reforms, FX market improvements, and a stabilising macroeconomic environment. The CBN attributes much of the progress to the FX reforms introduced under the leadership of Governor Olayemi Cardoso, as well as new Federal Government policies targeting improved local production, reduced forex demand pressures, and lower domestic prices. Looking ahead, analysts say sustaining these gains will require the CBN to maintain its FX reforms while fiscal authorities intensify efforts to boost foreign exchange earnings, particularly from gas, oil, and non-oil exports.

    Exchange rate positions

     The naira has achieved a notable milestone, strengthening by 3.5 per cent against the U.S. dollar over the past ten months, reaching N1,450/$ at the parallel market. This recovery, though modest, signals a crucial shift, driven by coordinated adjustments to fiscal and monetary policies by the Federal Ministry of Finance and the Central Bank of Nigeria (CBN).

    The start of the year saw the naira trading at around N1,555/$. However, a brief period of instability saw the rate slip to a high of N1,597/$ by the end of April. The subsequent six months were marked by intense policy intervention. The naira briefly firmed up at N1,475/$ in October 2025 at the official market before settling at N1,500/$ at the parallel market yesterday, marking a 3.5 per cent gain from the January starting point.

    CBN Governor Yemi Cardoso says naira is turning the corner, and becoming more competitive in the international markets. He said Nigeria’s economy has been fully restructured and is now resilient, with huge buffers against global risks.

    He spoke during the Intergovernmental Group of Twenty-Four (G-24) press briefing at the IMF/World Bank Annual Meetings in Washington DC, US. Cardoso, who is the leader of the Nigeria delegation at the meetings, said the naira has equally emerged as a competitive currency, with the economy witnessing positive trade balances and large businesses moving from imports to export of locally produced goods and commodities.

    According to him, the positive economic indicators have combined to create resilient and strong buffers, keeping the economy in great shapes. Speaking on the impact of the trade tariffs on the domestic economy, the CBN boss said the tariffs are less of problems for the country. “And for us again, oil is basically the only commodity that was so exposed to the tariffs, and the impact of that was relatively modest. We now have a more competitive currency with the results that, for once, we have a situation where we have a positive balance of trade surplus, and we expect it to be six per cent in GDP for some time.

    “So basically, what is happening is a complete restructuring of the economy, where we are encouraging people to go into domestic production, and, of course, discouraging imports. And I think we were very fortunate, because a lot of the things that were needed to have been done, we did them much earlier, and as a result of that, we’re able to create resilience and buffers against potential shocks,” he stated.

    What other stakeholders are saying

    The Director-General, the West African Institute for Financial and Economic Management (WAIFEM) Dr. Baba Musa, has called on government to ensure that 3.9 per cent growth for Nigeria in 2025 translate to decent jobs, rising incomes, improved productivity, and broader social welfare. In his report presented at the recently concluded 2025 IMF/World Bank Annual Meetings in Washington DC, titled: “Nigeria’s Economic Outlook at a Turning Point”, he said as Nigeria moves further into 2025, Nigeria’s economic story is one of resilience, renewal, and strategic recalibration.

    Musa, who is also the President, Nigerian Economic Society, said Nigeria’s economic trajectory is increasingly encouraging with the International Monetary Fund (IMF) projecting real Gross Domestic Product (GDP) growth of 3.9 per cent in 2025, up from 3.5 per cent in 2024, with further acceleration to 4.2 per cent in 2026.

    Musa said Nigeria in 2025 is at a critical inflection point, cautiously optimistic yet structurally fragile. “Gains in growth, inflation moderation, and investment confidence mark important progress, but the work is far from complete. To sustain the recovery, Nigeria must maintain macroeconomic stability, deepen structural reforms, and ensure that growth translates into tangible improvements for citizens. Achieving this requires collaboration among government, private sector, civil society, and development partners,” he said.

    According to him, by committing to policy consistency, human capital investment and inclusive growth, Nigeria can consolidate its recovery and emerge as a more competitive, resilient, and equitable economy in the years ahead. “Globally, economies are grappling with slowing growth, projected at 2.7% in 2025 by the IMF for advanced economies, and heightened geopolitical risks that affect trade and investment. Against this backdrop, Nigeria has demonstrated remarkable determination. Domestically, inflationary pressures, infrastructure deficits, and unemployment persist, yet they now represent policy frontiers rather than defining constraints,” he said.

    Musa said recent policy measures, ranging from fiscal consolidation to targeted monetary adjustments, have laid the groundwork for a sustainable growth trajectory. “The real test, however, lies not only in achieving stability but in ensuring that it translates into tangible socio-economic outcomes: decent jobs, rising incomes, improved productivity, and broader social welfare. If Nigeria deepens reforms, invests strategically in human capital, and leverages its structural advantages, the country can achieve not only recovery but inclusive and durable economic transformation,” he said.

    He said the growth for Nigeria is underpinned by stronger oil production following operational improvements and policy reforms in the petroleum sector. “Recovery in services, particularly telecommunications, financial services, and transport, reflecting resilient domestic demand. Improved agricultural output, thanks to favourable weather patterns and government support for mechanisation and inputs,” he said.

    He said the recent GDP rebasing has also given a more accurate reflection of the economy, capturing growth in high-potential sectors such as digital services, modular refining, and the creative industries. This expanded view highlights opportunities for job creation, innovation, and revenue generation that were previously underappreciated. According to him, inflation remains elevated but is gradually moderating.

    “Headline inflation declined to 18.02 per cent in September 2025, down from 20.12 per cent in August, reflecting improved food supply, seasonal harvests, and targeted interventions in the energy market. The Central Bank of Nigeria’s interest rate cut, the first since 2020, signals a nuanced policy shift: a deliberate effort to balance price stability with growth and employment objectives. This approach is consistent with modern macroeconomic management, where inflation targeting is tempered by the need to stimulate investment and production in key sectors,” he said.

    Read Also: CBN calls for stronger coordination to sustain economic recovery

    Speaking further, Musa said, “Investor sentiment is improving, illustrated by Shell’s approval of the HI Offshore Gas Project, expected to supply 350 million standard cubic feet of gas per day to Nigeria LNG. Economically, such projects deliver multiplier effects: they stimulate domestic suppliers, create high-skill and semi-skilled jobs, and strengthen Nigeria’s position as a reliable energy hub in Africa. They also enhance balance of payments stability, by promoting export-oriented production.”

    Moves to support economy

    The CBN under Cardoso is cultivating multiple FX sources to increase dollar inflows, boost dollar access to manufacturers and retail end users. From moves to improve diaspora remittances through new product development, the granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller FX model, and enabling timely access to naira liquidity for IMTOs, the apex bank has simplified dollar-inflow channels for authorized dealers and other players in the value chain. The move has led to substantial accretion to the gross FX reserves and supported the stability of the naira.

    Given that FX inflows to the economy are strategic in achieving monetary and fiscal policy stability, the CBN under Cardoso puts in a lot of efforts in attracting more inflows into the economy. Diaspora remittances to Nigeria, estimated at $23 billion annually, remain a reliable source of forex to the domestic economy. There are also other sources and policies that are being explored by the apex bank to keep dollar inflows coming.

  • Financial market analyst predicts interest rate cut by CBN

    Financial market analyst predicts interest rate cut by CBN

    Lukman Otunuga, Senior Manager and Market Analyst at FXTM, has forecast the possibility of the Central Bank of Nigeria (CBN) cutting interest rates by as much as 100 basis points on Tuesday, citing easing inflationary pressures and a busy week of high-impact global economic events.

    Otunuga noted that Nigeria’s annual inflation dropped to 16.05 percent in October 2025 — the lowest since March 2022 — providing the CBN with fresh room to stimulate economic growth through a rate cut.

    He added that indicators from Nigeria’s Q3 GDP report, expected this week, suggest further signs of recovery that could boost confidence in an expansionary monetary stance.

    On the global stage, the analyst said equity markets have opened the week strongly, led by gains in the tech sector amid rising expectations of a U.S. interest rate cut in December.

    Dovish signals from U.S. Federal Reserve officials last Friday have pushed the odds of such a cut to 70 percent, though upcoming economic data could alter those projections.

    Otunuga also highlighted ongoing geopolitical tensions, noting that weekend talks involving top U.S., Ukrainian, and European diplomats on a Russia–Ukraine peace plan have stalled, with European leaders rejecting the proposals. A deadlock, he warned, could trigger broad risk aversion in global markets.

    He further projected volatility for both the British pound and the U.S. dollar ahead of the UK Autumn Budget scheduled for Wednesday, November 26, 2026. With the UK facing a fiscal gap of up to £30 billion, expected tax hikes may pressure consumers, weaken growth, and intensify speculation around lower UK interest rates.

    For the U.S., he said retail sales and Producer Price Index (PPI) data due this week will provide clearer signals on economic health, adding that weaker-than-expected figures could strengthen expectations of a December Fed rate cut.

    Turning to cryptocurrencies, Otunuga said Bitcoin is still reeling from last week’s sharp selloff. Despite a slight rebound, the digital asset is on track for its worst month since 2022 and is down nearly 10 percent year-to-date.

    Trading at around $86,000, he warned that persistent weakness below $90,000 could trigger a further slide toward $80,500 and beyond.

    “Looking at commodities, oil flashed red amid hopes about a Ukraine-Russia peace deal, while gold has been stuck within a wide range since mid-November.

    “A potent fundamental catalyst may be needed to trigger a break above $4130 or below $4000. This may come in the form of geopolitical developments or key US data”, he concluded.