FX Market Reforms Raised Capital Inflows by 200%, Says CBN Governor

Olayemi Cardoso, the governor of the Central Bank of Nigeria, says reforms in Nigeria’s foreign exchange market have significantly improved liquidity, restored investor confidence and stabilised the naira.

Mr Cardoso said this on Thursday in Lagos while delivering a distinguished Alumni Lecture at St Gregory’s College as part of its Founder’s Day celebration.

The CBN governor said the reforms had eliminated distortions in the FX market and improved transparency.

According to him, the Apex Bank dismantled the multiple exchange rate system that previously created arbitrage opportunities and benefited only a few privileged participants.

“Through deliberate policy actions, we eliminated the system of multiple exchange rates and significantly reduced the parallel market premium from around 50 per cent in 2022 to less than two per cent on average in 2025,” he said.

Mr Cardoso said the FX market now operated with greater liquidity and efficiency, enabling market participants to transact without extraordinary interventions from the CBN.

He added that the apex bank had also cleared the backlog of unmet foreign-exchange demand, which had previously constrained businesses and investors.

The governor said the reforms had contributed to a surge in capital inflows, noting that investment flows into Nigeria increased by nearly 200 per cent between 2023 and 2025.

He also said the country’s external reserves had recently exceeded 50 billion dollars, reflecting improved balance-of-payments conditions and growing investor confidence in the economy.

According to him, the stability currently being witnessed in the Naira is the result of deliberate efforts to rebuild trust in Nigeria’s financial markets.

Mr Cardoso said the reforms were part of broader macroeconomic measures aimed at restoring stability and strengthening the country’s financial system.

He noted that the CBN had also returned to orthodox monetary policy and tightened policy measures to tackle inflation, which had declined from a peak of 34 per cent to about 15 per cent.

Mr Cardoso noted that strong financial institutions and transparent markets are essential foundations for sustainable economic growth. He said the reforms had positioned Nigeria’s economy to better withstand global shocks, including geopolitical tensions that could affect energy prices and international capital flows.

(NAN)