Tag: Central Bank of Nigeria (CBN)

The drop in May’s inflation rate to 22.97 per cent brings significant relief—boosting families’ purchasing power and reducing operational costs for businesses and the real sector. This decline reflects effective policy implementation by the Central Bank of Nigeria (CBN) and improved coordination between monetary and fiscal authorities. The Purchasing Managers Index (PMI) also indicates that Nigeria’s private sector remained in growth territory as the first half of 2025 closed, with business confidence rising sharply in June. For many Nigerians, the figures tell a positive story—one that signals progress toward broader macroeconomic stability, reports Assistant Editor COLLINS NWEZE

Inflation is one of the most commonly discussed economic concepts, yet it is often misunderstood. While different schools of thought offer varying perspectives, economists generally agree that inflation refers to a sustained increase in the overall prices of goods and services. It is typically measured using indicators such as the Consumer Price Index (CPI) or the implicit price deflator for Gross National Product (GNP).

In simple terms, inflation occurs when “too much money chases too few goods,” leading to a decline in the purchasing power of money. As inflation rises, the value of the naira diminishes, meaning the same amount of money buys fewer goods and services over time. In Nigeria, a significant development occurred in May 2025 when the inflation rate dropped to 22.97% year-on-year. This indicates that, on average, prices increased by 22.97% between May 2024 and May 2025. For instance, if a bag of onions cost N100,000 in May 2024, a 22.97% inflation rate means it would cost approximately N122,970 in May 2025. A reduction in inflation signals that prices are rising at a slower pace—not necessarily that prices are falling.

One key driver  behind this moderation is the balance between supply and demand. When supply outpaces demand, consumers are less willing to pay higher prices, helping to dampen inflationary pressure. Supporting this trend, Nigeria’s Purchasing Managers’ Index (PMI) revealed that private sector activity remained in growth territory as of June 2025. Business confidence improved, though the pace of growth in output, new orders, and purchases slowed from the previous month. Encouragingly, firms reported that input cost pressures eased, and output price increases were the slowest recorded in over two years—offering further hope for inflation control.

The headline Purchasing Managers’ Index™ (PMI®) stayed above the 50.0 benchmark for the seventh straight month in June, indicating continued improvement in private sector business conditions. However, the index fell to 51.6 from 52.7 in May, marking the slowest growth in the current expansion streak. A reading above 50.0 signals economic improvement, while below 50.0 indicates deterioration. The drop in inflation to 22.97% is expected to ease cost pressures, offering relief to many manufacturers through reduced production costs and potentially boosting overall economic activity in the coming months.

The Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni,  commented: “Business conditions remain in the expansionary territory for the seventh consecutive month in June, but the pace of expansion slowed for the third consecutive month after peaking in March. Specifically, the headline PMI settled lower at 51.6 points in June from 52.7 points in May – below this year’s average PMI print of 53.1 points.

“Some firms noted muted demand conditions in June, while others witnessed higher activity linked to securing new customers and greater new orders. Nonetheless, Optimism in the 12-month outlook for output surged higher to 83.9 points in June from 70.9 in May – the highest level since August 2022 (85.8 points) and moving much closer to the series average (89.4 points) after a period of historically subdued expectations. Survey participants linked this confidence to hopes that sufficient funding would be available to invest in improving and expanding operations,” he said.

Output price inflation slowed for the second consecutive month in June, reaching its weakest level since May 2023. Despite this, selling prices still rose sharply as businesses continued to pass higher input costs to consumers. Typically, when the supply of money decreases without a corresponding drop in output, prices tend to fall. Lagos-based economist Michael Nwadike attributed recent improvements to the positive impact of Nigeria’s GDP rebasing, a modest slowdown in food prices, and a seven per cent decline in petrol costs. “For many Nigerians, the numbers tell a good story and should signal exchange rate and price stability,” he noted.

Analysts agree that price stability is essential for sustainable economic growth. Around the world, central banks focus heavily on inflation management, dedicating substantial resources to maintain stability. For the Central Bank of Nigeria (CBN), the current environment demands steadfast efforts to stabilise prices and the exchange rate.

Read Also: Senate moves to amend procurement law to support local contractors

To that end, the apex bank has adopted inflation-targeting measures, including raising the Monetary Policy Rate (MPR) by 875 basis points to 27.5 per cent in 2024. This decisive move aims to curb inflation and reinforce macroeconomic stability. With easing cost pressures and declining inflation, manufacturers and consumers alike may soon experience relief. Continued policy vigilance from the CBN will be crucial in sustaining this trajectory and fostering an environment where inflation is controlled, the currency is stable, and the economy can grow with renewed confidence.

In its quest to tame inflation, the Central Bank of Nigeria (CBN) recently convened the 2025 Monetary Policy Forum, bringing together fiscal authorities, legislators, private sector leaders, development partners, subject-matter experts, and academics. Themed “Managing the Disinflation Process,” the forum aimed to deepen monetary policy understanding, foster dialogue, and build stronger alignment around strategies driving economic stability.

The CBN Governor Olayemi Cardoso emphasised that the apex bank is focused on sustaining price stability, implementing a transition to an inflation-targeting regime, and crafting strategies to restore purchasing power and reduce economic hardship. He reaffirmed the bank’s disciplined approach to monetary management, noting its positive impact on the economy. “These actions have yielded measurable progress: relative stability in the FX market, narrowing exchange rate disparities, and a rise in external reserves to over $40 billion as of December 2024,” Cardoso stated.

He stressed that the CBN’s monetary policy must remain forward-looking, adaptive, and resilient in the face of evolving global and domestic shocks. Importantly, he called for enhanced coordination between monetary and fiscal authorities to effectively manage disinflation and rebuild investor confidence. “Managing disinflation amidst persistent shocks requires not only robust policies but also coordination to anchor expectations and maintain investor trust,” he said.

Additionally, the CBN has also been controlling the growth of money supply to achieve price stability. Expectedly, Nigeria’s annual inflation rate eased to 22.97 per cent in May from 23.71 per cent in April 2025, the National Bureau of Statistics (NBS) said. The statistics office said the May 2025 headline inflation rate decreased 0.74 per cent compared to the April 2025 headline inflation rate.

On a year-on-year basis, the NBS said the headline inflation rate was 10.98 per cent lower than the rate recorded in May 2024 (33.95 per cent). This, it said, shows that the Headline inflation rate (year-on-year basis) decreased in May 2025 compared to the same month in the preceding year. The NBS said on a month-on-month basis, the headline inflation rate in May 2025 was 1.53 per cent, which was 0.33 per cent lower than the rate recorded in April 2025 (1.86 per cent). “This means that in May 2025, the rate of increase in the average price level is lower than the rate of increase in the average price level in April 2025,” it said.

According to the report, food inflation rate in May 2025 was 21.14 per cent on a year-on-year basis. This, it said, was 19.52 per cent points lower compared to the rate recorded in May 2024 (40.66 per cent). Nigeria has experienced a sharp increase in food prices in recent years. This trend worsened in 2023 following President Bola Tinubu’s removal of petrol subsidies and adoption of a floating exchange rate for the naira.

This shift has led to a steep increase in the cost of staple food, pushing many Nigerians further into poverty and heightening food insecurity. The persistent price surge over the past year has led to several farms and businesses closing, with many agricultural producers scaling back their output due to insecurity and unpredictable weather conditions affecting rural areas. The World Bank also recently gave a positive verdict on Nigeria’s economic growth trajectory, highlighting three-year unbroken growth for the country.

In the bank’s Global Economic Prospects for June, the bank posited that Nigeria will have three-year unbroken growth records- growing at 3.6 per cent in 2025, 3.7 per cent in 2026 and 3.8 per cent in 2027. The World Bank however, slashed its global growth forecast for 2025 by 0.4 percentage point to 2.3 per cent, saying that higher tariffs and heightened uncertainty posed a “significant headwind” for nearly all economies.

Inflation dip comes with benefits

The Comercio Partners, in its 2025 macroeconomic outlook, highlighted that the rebasing of Nigeria’s Consumer Price Index (CPI) to 2024 would also create statistical effects that could lower inflation figures. From the stabilisation of exchange rates, the normalisation of energy prices following the subsidy removal to improved liquidity in the forex market, the economy has what it takes to achieve price stability within the year.

The Comercio Partners reports emphasised the importance of local refining capacity expansion, particularly with the launch of the Dangote Refinery. This development is expected to reduce the impact of exchange rate fluctuations on energy prices. By relying more on domestically refined petroleum, Nigeria is likely to see a reduction in energy price volatility. This, combined with a more stable exchange rate, is expected to lower production and transportation costs, creating a positive ripple effect throughout the broader economy.

According to Ifeanyi Ubah, head of investment research and global macro strategist, “We expect headline inflation to decrease to around 15 percent in the first half of 2025, indicating a gradual return to economic stability.” An economist, and CEO, Financial Derivatives Company Limited, Bismarck Rewane said a stronger oil sector could mean more stable fuel prices and a boost in government revenue. The Economic Intelligence Unit (EIU) projects a four per cent rebound in retail sales in 2025, with consumer spending expected to recover modestly to $127 billion. There was also significant input by the monetary authorities in bringing inflation down.

Director of Trading at Verto, Charlie Bird, said a number of factors, including rising crude oil prices portend positive signal for the economy. He said oil price stability or appreciation, strong dollar liquidity in NAFEM alongside a tight spread to parallel market, stable or increasing foreign reserve data and any form of FX appreciation with low volatility portend positive signals for the economy, and will impact positively on inflation data.

The ongoing recapitalisation of banks and the recently elapsed capital deadline for Bureaux De Change (BDCs) underscore the Central Bank of Nigeria’s (CBN) determination to build a strong and resilient financial system. These reforms are expected to yield significant benefits for businesses and the broader economy—ranging from increased access to credit to the continued expansion of the e-payment ecosystem. Analysts maintain that enforcing high regulatory standards is essential for safeguarding Nigeria’s financial landscape and aligning it with global best practices, writes Assistant Editor COLLINS NWEZE

The ongoing recapitalisation of Bureaux De Change (BDCs), alongside the capital raising efforts by banks, is aimed at building a stronger and more resilient financial system. A major expected outcome of these initiatives is the emergence of bigger, more robust banks that can better support Nigeria’s economic ambitions.

The Central Bank of Nigeria (CBN) believes that achieving sustainable economic growth is heavily dependent on a solid financial sector. As such, it is aligning monetary and fiscal policies to support the government’s broader vision—one that includes empowering businesses and growing the economy to a $1 trillion benchmark.

On March 28, 2024, the CBN announced a two-year bank recapitalisation programme, which began on April 1, 2024, and will run until March 31, 2026. Under the plan, commercial banks must now meet new minimum capital thresholds: N500 billion for banks with international licences; N200 billion for those with national licences; N50 billion for regional licence holders. Merchant banks are required to shore up capital to N50 billion, while non-interest banks must meet N20 billion and N10 billion for national and regional licenses respectively. Similarly, the CBN significantly raised the minimum capital requirements for BDCs in May 2024. Tier 1 operators must now have N2 billion, and Tier 2 BDCs N500 million, a substantial jump from the previous N35 million benchmark.

The June 3 deadline for compliance remains unchanged, as the apex bank insists the new thresholds are critical to sanitising and stabilising the foreign exchange market. In all, these reforms reflect the CBN’s strategic push to ensure Nigeria’s financial institutions are well-capitalised, globally competitive, and capable of playing a central role in driving inclusive economic growth. According to the apex bank, it remains committed to ensuring transparency, stability and compliance in the foreign exchange market and will continue to engage with all relevant stakeholders in accordance with its statutory mandate.

The CBN Governor, Olayemi Cardoso, had explained that bank recapitalisation ensures that lenders are well-capitalised, enabling them to take on greater risks, particularly in underserved markets. With stronger capital bases, banks can provide more loans and financial products to Micro Small and Medium Enterprises (MSMEs), rural communities, and other vulnerable segments that have previously struggled to access formal financial services. Cardoso said the recapitalisation policy not only strengthens financial stability but also serves as a catalyst for inclusive growth.

“By enabling banks to extend more credit to MSMEs, we enhance job creation and productivity. Furthermore, with increased capital, banks can invest in technology and innovation, crucial for driving digital financial services such as mobile money and agent banking. These technologies are key to breaking down geographic and economic barriers, bringing financial services to even the most remote areas,” he stated.

He said Nigeria has what it takes to deepen financial inclusion and support the growth of business and economy. He said the recapitalisation exercise will also support government’s efforts to achieve $1 trillion economy. The CBN further underscored the importance of banking recapitalisation as a major catalyst for the achievement of the $1 trillion economy agenda of the government.

Read Also: 2027: Northeast APC declares support for Tinubu/Shettima ticket

President, Association of Bueaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said BDCs will continue to remain the third level of the forex market and ensure the closing of the gap between the official and parallel market rate. ABCON had earlier called on the CBN to review the minimum capital base for tier-1 operators to N500 million and tier-2 operators to N100 million, a suggestion that was declined. 

Banking sector remains robust

Cardoso explained that the banking sector remains robust with key indicators reflecting a resilient system. “The non-performing loan ratio remains within the prudential benchmark of five per cent, showcasing strong credit risk management. The banking sector liquidity ratio comfortably exceeds the regulatory floor of 30 per cent, a level which ensures banks are maintaining adequate cash flow to meet the needs of customers and their operations. The recent stress test conducted also reaffirmed the continued strength of our banking system.

“I am pleased to note that a significant number of banks have raised the required capital through right issues and public offerings well ahead of the 2026 deadline! I believe that the banking sector is in a strong position to support Nigeria’s economic recovery by enabling access to credit for MSMEs and supporting investment in critical sectors of our economy,” he said.The Group Managing Director of United Bank for Africa (UBA), Mr. Oliver Alawuba, described the CBN ongoing bank recapitalisation policy as both timely and essential in positioning the financial system to meet the demands of a growing and globally competitive economy. According to Alawuba, the initiative is expected to boost the resilience of the banking sector by strengthening its capacity to withstand economic shocks such as inflation, currency volatility, and global geopolitical disruptions. He noted that the policy will also place Nigerian banks on a stronger footing to finance the country’s long-term economic transformation, including funding of large-scale infrastructure and industrial projects.

Alawuba stressed that the recapitalisation policy goes beyond regulatory compliance. It is a forward-looking strategy aimed at equipping Nigerian banks to operate at the scale and sophistication required by a trillion-dollar economy. He said the move would enhance the sector’s ability to support both traditional economic drivers such as oil and gas, agriculture, and manufacturing, as well as emerging sectors like fintech, green energy, and infrastructure development. “Nigerian banks need adequate capital buffers to meet the evolving demands of these sectors. Without this, the industry cannot effectively rise to the challenge,” he said.

Alawuba pointed out the sharp contrast between Nigerian banks and their counterparts in more advanced economies, where bank assets typically range between 70 to 150 per cent of Gross Domestic Product (GDP). In Nigeria, bank assets accounted for just 11.97 percent of GDP as of 2024, a gap he said must be addressed if the country’s financial system is to align with international standards. He commended the CBN’s recent directive mandating a significant increase in minimum capital thresholds, describing it as a recognition of the urgent need for stronger financial institutions capable of delivering on national priorities such as infrastructure expansion, digital transformation, inclusive financial services, and economic diversification.

Alawuba concluded that a robust, well-capitalised banking sector is critical for Nigeria’s aspiration to become a one trillion-dollar economy, and the recapitalisation drive is a step in the right direction to achieve that goal.

Fostering compliance. By fostering a strong culture of compliance and strengthening risk management frameworks, the CBN’s leadership goal remains to protect Nigeria’s financial sector while ensuring its resilience and credibility locally and internationally.

To achieve these goals, the apex bank has reaffirmed its commitment to maintaining a transparent and resilient financial system by reinforcing regulatory compliance and risk management across Nigerian financial institutions. The financial sector regulator recently held a high-level Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop in collaboration with Citi, in Lagos. During the event, the Special Adviser to the CBN Governor on Compliance, Ms. Shola Phillips, emphasised the need for strict adherence to global banking standards to sustain confidence in Nigeria’s financial sector.

“Regulators expect financial institutions to maintain dynamic, risk-based AML/CFT programmes that are responsive to the evolving financial environment. Proactive engagement with regulatory developments and the integration of innovative compliance solutions are essential for institutions to meet these expectations effectively,” Phillips stated.

The training, attended by compliance officers, trade operations specialists, and correspondent banking teams from various financial institutions, provided critical insights into global regulatory trends, emerging financial risks, and strategies for sustaining correspondent banking relationships.

Managing Director of Citi’s Correspondent Banking Group, Siobhan Ni Ealaithe, highlighted the critical role of robust governance frameworks in mitigating risks. She underscored the necessity of Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) protocols in preventing illicit financial activities.

Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, provided a stark assessment of financial crime risks, noting that over $3 trillion in illicit funds flow through the global financial system annually. She urged financial institutions to strengthen due diligence measures, leverage technology-driven risk assessments, and uphold transparency in all transactions.

Speaking recently to bankers, Cardoso said the ethics and professionalism of bankers and treasurers are under constant scrutiny. According to him, the apex bank introduced the FX Global Code for all authorised dealers and market participants to ensure full compliance with regulations. He urged the Chartered Institute of Bankers of Nigeria (CIBN) to take the lead in upholding and demonstrating the highest standards in the industry. “At the Central Bank, we have intensified surveillance of market activities to ensure compliance and eliminate bad actors who attempt to undermine the system. Together, we must build a market based on strong governance and transparency. As regulators, we will maintain a zero-tolerance approach to compliance violations,” he said.

In the same vein, Other Financial Institutions (OFIs) hold significant potential to drive productivity and economic growth by expanding access to credit and financial services for underserved individuals and businesses. To unlock this untapped potential, the CBN aim to strengthen key institutions—particularly Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs)—to enhance their efficiency and impact.

“Our strategy includes implementing model mortgage foreclosure laws to stimulate lending and reduce delinquency, integrating PMBs and MFBs into the GSI platform to minimise non-performing loans, and leveraging Development Finance Institutions (DFIs) more effectively to provide increased on lending facilities to well-managed OFIs,” he said.

Cardoso explained that the Nigerian payments ecosystem has been ahead of many advanced economies yet has not always received the recognition it deserves. He said that many innovations that other countries are only now experiencing have been part of our system for years. We must celebrate these successes, as they contribute to building our global reputation.

The foreign exchange market is at the centre of Nigeria’s economic and business growth. Last week, the Central Bank of Nigeria (CBN) took strategic step to enhance transparency and boost market confidence with the inauguration of the Nigeria Foreign Exchange Code (FX Code) in Abuja. The FX Code has so far ignited naira rally at both official and parallel markets, but its overall success will depend on banks and other financial institutions compliance with the implementation rules set by the apex bank. Assistant Business Editor COLLINS NWEZE reports

Globally, foreign exchange markets are built on the foundation of ethics, transparency, and regulatory compliance, all under the vigilant supervision of central banks. These principles not only define the operations of these markets but also serve as key benchmarks for evaluating their effectiveness.

The Nigerian foreign exchange market is no different. Last week, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, unveiled the Nigeria Foreign Exchange Code (FX Code), underscoring the importance of integrity, fairness, transparency, and efficiency as essential drivers of the country’s economic growth and stability. He highlighted that the FX Code is based on six core principles: ethics, governance, execution, information sharing, risk management and compliance, and confirmation and settlement processes. These principles, he noted, align with international standards while also addressing the unique challenges within Nigeria’s foreign exchange market.

According to Cardoso, “The FX Code represents a decisive step forward, setting clear and enforceable standards for ethical conduct, transparency and good governance in our foreign exchange market. The era of opaque practices is over. The FX Code marks a new era of compliance and accountability. Under the CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions.”

FX Code impact in market operations

The naira has sustained rally at both official and parallel markets since the launch of the FX Code last week, with the local currency, reaching its strongest level in seven months. Analysts from Cordros Securities said the naira strengthened significantly, appreciating by 3.8 per cent week-on-week to N1,474.78/$ at the Nigerian Autonomous Foreign Exchange Market (NAFEM). This sharp increase is attributed to the policies implemented by the CBN, especially the FX code, which have influenced market dynamics and contributed to the currency’s strengthening.

This latest movement marks a return to that range, reflecting the impact of recent monetary and foreign exchange measures introduced by the CBN to stabilise the currency and improve market confidence. Managing Director, Afrinvest West Africa Limited, Ike Chioke, said naira gained 4.3 per cent month-on-month against the greenback to close at N1,474.78/$1.00. Similarly, parallel market rate appreciated 1.4 per cent to N1,610.00/$1.00. He projected a sustained positive naira performance this month, supported by CBN’s efforts at entrenching transparency in market operations. “In the new month, we expect the naira to remain on a positive trajectory bolstered by CBN’s effort at currency stability,” he said in emailed note to investors.

Read Also: Minister orders probe of alleged criminal activities at Okere Correctional facility

The naira rally was also driven by inflows from Foreign Portfolio Investors (FPIs), substantial contributions from International Oil Companies (IOCs), and the CBN’s $18.40 million intervention to authorised dealers. Other analysts also mentioned the renewed interest of Foreign Portfolio Investors (FPIs) in the FX market—driven by improved market confidence, a more efficient FX framework, and strengthening macroeconomic conditions—alongside the CBN’s sustained market interventions, is expected to continually support naira stability.

On his part, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, attributed the ongoing rebound of the naira against dollar and other world currencies to the CBN’s  policies. Gwadabe hinged the naira rally to the newly implemented Foreign Exchange (FX) Code, rising investors’ confidence, and policies supporting more dollar inflows through diaspora remittances. He backed the apex bank’s position that the FX Code is comprehensively addressing various aspects of market conduct and practice; it is not intended to be exhaustive.

He said the policy authorises the CBN to establish and enforce directives regarding the standards for financial institutions under which FX deals are to be conducted. Gwadabe said the code will further entrench transparency and accountability in the FX market, and continually sustain naira rally. He also backed CBN’s position that all institutions engaged in the foreign exchange market must also provide the CBN with a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code.

These plans are expected to be formally approved and signed by the institution’s board of directors, and it must be accompanied by relevant extracts from the board meeting where the plan was reviewed and endorsed. CEO, Countryside Markets Limited, Stevens Michael, said: “For me, the whole idea is just to ensure that there is a lot more sanity in the foreign exchange market because those characters have really created a whole lot of problems over the years in the foreign exchange market,”

“I think that is what the CBN is trying to do and the more we’re able to sanitise the markets, I think the more stability it will achieve in the foreign exchange market,” he said.

The CBN has stated that while every effort has been made to ensure that the FX Code comprehensively addresses various aspects of market conduct and practice, it is not intended to be exhaustive. Governor Cardoso also noted that the journey towards market reform is already yielding results. He stated, “The year 2024 was marked by structural reforms that sought to return the naira to a freely determined market price and ease volatility as several distortions were removed from the market.”

Beyond the foreign exchange market, the FX Code forms part of the CBN’s renewed focus on compliance across the financial sector. Its six guiding principles, alongside 52 sub-principles, were designed to become the benchmark for conduct across all participating institutions.

Banks role in code implementation

Commercial banks are major stakeholders in the FX Code implementation. Analysts have therefore called on the CBN to institute strong measures of compliance checks to ensure that banks, which in the past constituted one of the weakest links to FX policy implementation, comply with the new policy measures.

Although the apex bank has secured their support and commitment to policy implementation, routine regulatory checks will help sustain market gains from the project. The formal signing by participating banks, symbolising a unified effort to promote transparency and trust but the apex bank regulator should take steps that guarantees that the lenders match their words with action.

Understanding FX Code Rules

Issued as a guideline for the foreign exchange market, the FX Code is backed by the authority of the CBN Act of 2007 and the Banks and Other Financial Institutions Act (BOFIA) of 2020. These legislative instruments empower the CBN to establish and enforce directives regarding the standards financial institutions must follow in conducting foreign exchange business in Nigeria.

The FX Code, therefore, serves as an official directive that all market participants are expected to observe in their operations. As part of compliance requirements, market participants must conduct a self-assessment of their adherence to the FX Code and submit a report detailing their level of compliance to the CBN by January 31, 2025.

Following this, all institutions engaged in the foreign exchange market must also provide the CBN with a detailed implementation plan outlining how they intend to achieve full compliance with the FX Code. This plan must be formally approved and signed by the institution’s board of directors, and it must be accompanied by relevant extracts from the board meeting where the plan was reviewed and endorsed.

The CBN has also taken strategic steps to tackle inflation. The apex bank recently hosted the Monetary Policy Forum 2025, featuring fiscal authorities, legislative, private sector, development partners, subject-matter experts, and scholars with the theme: “Managing the Disinflation Process.”

Cardoso explained that the apex bank’s focus is to sustain price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship.

The CBN is continuing its disciplined approach to monetary policy, aimed at curbing inflation and stabilising the economy. “These actions have yielded measurable progress: relative stability in the FX market, narrowing exchange rate disparities, and a rise in external reserves to over $40 billion as of December 2024. The CBN also focused on strengthening the banking sector, introducing new minimum capital requirements for banks (effective March 2026) to ensure resilience and position Nigeria’s banking industry for a $1 trillion economy,” he said.

Already, remittances through International Money Transfer Operators (IMTOs) rose 79.4 per cent to US$4.18 billion in the first three quarters of 2024, demonstrating the positive impact of FX reforms. Additionally, the CBN lifted the 2015 restriction barring 41 items from accessing FX at the official market to enhance trade and investment. These reforms and developments reflect the bank’s commitment to creating an enabling environment for inclusive economic development. However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance.

“As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Cardoso reaffirmed.

To tackle the pressing challenge of inflation, the CBN acted decisively by raising the Monetary Policy Rate by 875 basis points to 27.5 per cent in 2024—an essential move to contain inflation and restore stability. “Our tight monetary policy stance has altered the previous dire trajectory, and we expect a downward trend in 2025. Inflation remains unacceptably high, but the signs are encouraging, particularly given that the full effects of monetary policy typically take 6-9 months to impact the consumer sector. Our commitment is unwavering: we will prioritize price stability until its benefits are felt by every Nigerian,” Cardoso said during the last bankers’ dinner held in Lagos.

The CBN under Cardoso has equally undertaken critical reforms to unify Nigeria’s exchange rate, eliminating distortions and restoring transparency. This unification has enabled us to clear the outstanding foreign exchange obligations, giving businesses—ranging from manufacturers to airlines—the confidence to plan and invest in the future. Analysts insist that these measures under Cardoso have not only lifted the forex market and entrenched long-lasting stability but laid foundation for sustainable economic growth.