The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has reaffirmed the apex bank’s commitment to stabilizing the foreign exchange market, vowing to eliminate bad actors whose activities contribute to the volatility of the naira.
This comes as the naira depreciated slightly at the official foreign exchange market on Tuesday, closing at N1,532.39/$, compared to N1,531.19/$ on Monday marking a 0.08% decline.
Despite this marginal drop, the movement reflects relative stability, as the market continues to adjust to recent FX reforms and shifting supply-demand dynamics.
Steady Parallel Market Rate Amid CBN’s FX Surveillance
At the Bureau De Change (BDC) segment, the exchange rate remained unchanged at N1,570/$ for both days, highlighting steady demand for physical dollars in the informal market.
The relatively stable BDC rate suggests that, while fluctuations persist at the official FX window, the impact on street trading remains muted, even as the CBN intensifies its crackdown on forex speculators.
The slight depreciation at the official market coincides with the CBN’s broader efforts to align the FX market with market fundamentals.
Cardoso Reiterates Commitment to Market Stability
In a statement released on Tuesday following the February 2025 Monetary Policy Committee (MPC) meeting, Governor Cardoso emphasized the CBN’s duty to protect the market from practices that could jeopardize price stability and investor confidence.
“Given the importance of the exchange rate in the fight against inflation and the sustenance of economic recovery, we must maintain heightened surveillance of our foreign exchange market and root out any bad actors whose activities threaten market stability,” Cardoso said.
“The Central Bank has an unwavering commitment to this objective.”
His remarks reinforce the CBN’s aggressive stance against forex speculators, who are often blamed for disrupting market stability and driving artificial naira devaluation.
CBN’s FX Reforms Showing Results
The CBN has introduced several reforms aimed at stabilizing the naira, restoring investor confidence, and ensuring a transparent FX market. These include:
The Electronic Foreign Exchange Matching System (B-Match)
The Nigeria Foreign Exchange Code
These initiatives are designed to increase transparency, enforce ethical practices, and improve operational efficiency in the FX market.
Renewed Investor Confidence Strengthens Market Liquidity
Cardoso noted that these reforms are already yielding results, as evidenced by
A relative appreciation of the naira
Improved FX market liquidity
Increased foreign remittance inflows
Higher export proceeds and foreign direct investment (FDI)
He added that speculative pressures on the naira have reduced, leading to greater demand for the official FX market instead of the parallel market.
MPC Retains Interest Rate, Monitors Inflation Trends
At the February MPC meeting, the committee voted to retain the Monetary Policy Rate (MPR) at 27.50%, as part of its strategy to curb inflation and maintain financial stability.
The committee acknowledged that
FX market reforms and tighter monetary policies are gradually reducing inflationary pressures.
The rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS) has provided a clearer picture of inflation trends.
Despite these improvements, Cardoso admitted that the FX market remains a key pressure point in Nigeria’s macroeconomic outlook.
CBN Urges Vigilance as FX Market Faces Continued Pressures
While acknowledging signs of progress, the CBN Governor stressed that sustained vigilance is crucial to maintaining forex market stability.
“Maintaining stability in the FX market is not just a monetary goal, but a necessary condition for broader economic recovery and resilience.”
Cardoso highlighted that macroeconomic indicators such as improving oil production, a positive current account balance, and robust external reserves strengthen the CBN’s ability to defend the naira.
However, he warned that ongoing structural challenges including the removal of fuel subsidies and fiscal policy reforms necessitate continued oversight and regulatory intervention.
The CBN’s fight against forex speculators is set to intensify, as the bank doubles down on FX reforms and regulatory oversight to protect the naira.
With the official and parallel market rates showing signs of stability, the focus now shifts to ensuring long-term sustainability in Nigeria’s foreign exchange system.
