The Central Bank of Nigeria (CBN) is now taking tougher actions in the foreign exchange market, aiming to stop speculators and bring more stability to the naira. These fresh efforts are part of the CBN’s wider plan to strengthen the Nigerian economy through strict monetary policies and better transparency in the forex system.
Over the past two years, Nigeria’s currency, the naira, has lost almost 249 per cent of its value. On May 8, 2023, the exchange rate was N460.94 to a dollar, but by May 7, 2025, it had jumped to N1,608.60 per dollar at the Nigerian Foreign Exchange Market. This sharp drop affected businesses and households across the country.
When Olayemi Cardoso became CBN Governor on September 15, 2023, the dollar was being sold at N955 in the black market and N785.39 officially. This large gap gave speculators room to make quick profits while genuine businesses struggled to get dollars. At that time, the CBN was facing a backlog of over $7 billion in unmet forex requests.
To reduce this pressure, the CBN floated the naira on June 14, 2023. This move allowed market forces to determine the value of the currency. The idea was to stop the CBN from constantly using Nigeria’s foreign reserves to defend the naira and also to increase investor confidence. Though this led to the naira losing nearly 54 per cent of its value in 2024—from N997/$ on December 31, 2023 to N1,535/$ by the end of 2024—it helped close the gap between official and black market rates and improved dollar supply in the market.
Recently, the dollar was sold at N1,608.60 officially and N1,620 in the black market, according to abokiforex.com. The difference is now much smaller, thanks to CBN reforms such as the introduction of the Electronic FX Matching System (B-Match) and the Nigeria Foreign Exchange Code. These tools are designed to make forex transactions more transparent and efficient.
Cardoso stated that Nigeria’s foreign reserves now stand at over $38 billion, covering nearly 10 months of imports. He said the country also recorded a balance of payments surplus of $6.83 billion in 2024, the highest in many years. According to him, these gains were possible due to better policies, rising exports, diaspora remittances, and renewed foreign investor interest.
He also noted that JP Morgan, one of the world’s largest banks, is planning to expand its operations in Nigeria by applying for a merchant banking licence. The bank has had a presence in Lagos since the 1980s and now wants to offer dollar loans to big Nigerian companies. This is part of a wider plan by JP Morgan CEO Jamie Dimon to grow the bank’s footprint across Africa.
Nigeria is also in talks to return to the JP Morgan Government Bond Index, from which it was removed in 2015. Back then, foreign investors were frustrated with capital controls and limited access to forex. But with the current reforms, the Debt Management Office believes investor confidence is returning.
Ratings agency Fitch recently upgraded Nigeria’s credit outlook due to these policy reforms, including unifying exchange rates, tighter monetary rules, and ending fuel subsidies. Fitch also raised the ratings of seven Nigerian banks, a sign of growing stability in the financial system.
At the IMF/World Bank Spring Meetings in Washington D.C., Cardoso said Nigeria’s economy is now stronger and more stable. He explained that despite global uncertainties, the reforms taken in the past 18 months are attracting investors and improving the economy’s outlook.
Bismarck Rewane, a Non-Executive Director at Parthian Partners, agreed that Nigeria is slowly coming out of its toughest economic period. He called for more transparency in sectors like power and oil and stressed that investment—not just revenue—is key to recovery.
CBN also hosted the 2025 Monetary Policy Forum to focus on managing inflation. The governor said the bank will stick to inflation-targeting policies and support stronger purchasing power for Nigerians. The bank also plans to implement new capital rules for banks from March 2026, in preparation for Nigeria’s goal of becoming a $1 trillion economy.
Despite the challenges, the CBN believes the Nigerian economy is now heading in the right direction. Cardoso said the tough decisions are already bringing positive results, and the central bank will continue pushing forward to ensure long-term economic stability.
