The Central Bank of Nigeria (CBN) remains unwavering in its mission to maintain order in the foreign exchange market, ensuring the naira’s stability by identifying and addressing disruptive market activities. Governor Olayemi Cardoso reiterated this stance, emphasizing the apex bank’s dedication to tackling practices that undermine exchange rate stability.
Recent data indicates that the naira saw a slight dip at the official forex market on Tuesday, closing at N1,532.39/$ compared to N1,531.19/$ the previous day. This marginal decline of 0.08% signals a relatively stable market, despite ongoing fluctuations driven by evolving demand-supply dynamics and recent economic reforms.
Meanwhile, the Bureau De Change (BDC) segment held steady at N1,570/$, suggesting stable demand for physical dollars in the informal sector. This reflects the impact of CBN’s intensified surveillance and intervention efforts across different FX platforms.
In a statement released during the February 2025 Monetary Policy Committee (MPC) meeting, Cardoso underscored the CBN’s proactive measures to protect the foreign exchange market from manipulative practices that threaten investor confidence and economic stability.
“The exchange rate plays a crucial role in controlling inflation and sustaining economic recovery,” Cardoso explained. “To safeguard market integrity, we must enhance surveillance, eliminate harmful practices, and ensure the naira’s stability.”
His statement follows a series of strategic reforms introduced by the CBN to realign the FX market with fundamental economic principles. Key initiatives include the introduction of the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code, designed to enhance transparency, promote ethical trading, and improve overall market efficiency.
These reforms are already showing promising results, with the naira demonstrating relative strength and improved liquidity in the FX market. Cardoso attributed this progress to renewed foreign investor confidence, which has been bolstered by sustained remittance inflows, increased export earnings, and steady foreign direct investment.
A noticeable shift in demand toward the official FX window also indicates reduced speculative trading, further stabilizing the market. The MPC maintained the Monetary Policy Rate at 27.50%, acknowledging that recent monetary tightening and FX policies are contributing to a gradual decline in inflationary pressures, particularly following the rebasing of Nigeria’s Consumer Price Index by the National Bureau of Statistics.
Despite these improvements, the FX market remains a critical pressure point in Nigeria’s economic outlook. Cardoso stressed the importance of continued regulatory oversight and vigilance to prevent market distortions and ensure sustainable stability.
Moreover, he highlighted that stabilizing the FX market is not merely a monetary policy goal but a crucial element in fostering broader economic resilience. This is particularly vital as the nation continues adjusting to fiscal policy changes, including fuel subsidy removal and other structural economic reforms.
The February MPC communique also pointed to broader macroeconomic progress, such as a positive current account balance, improving oil production, and robust external reserves. These factors collectively strengthen the CBN’s ability to manage liquidity and support the naira.
While challenges persist, aligning fiscal and monetary policies with institutional reforms and targeted market surveillance remains key to building a more credible, resilient, and investor-friendly financial system.