Obinna Eleko looks at how the governor of the central bank is revamping Nigeria's foreign exchange strategy.
When Olayemi Cardoso assumed leadership of the Central Bank of Nigeria (CBN) in late 2023, the naira was battered, confidence was thin, and the foreign exchange (FX) market was riddled with distortions.
Now, through sweeping reforms and a bold recalibration of foreign exchange (FX) management, he is attempting not just to stabilise the currency but to fundamentally rewrite Nigeria's FX story.
Return of BDCs
The decision of Nigeria's central bank to allow licensed bureaux de change (BDC) operators back into the Nigerian Foreign Exchange Market (NFEM) is one of the moves to ensure that Nigeria's FX management story remains positive.
By capping weekly FX purchases at $150,000 per BDC and enforcing strict compliance with existing operational guidelines, the CBN says it seeks to achieve a balance between market support and regulatory discipline.
Under the new directive, all BDCs duly licensed by the CBN are permitted to access FX through any authorised dealer bank of their choice, at the prevailing market rate.
The policy, according to the central bank, is also aimed at deepening market efficiency and ensuring broader access to foreign exchange across the economy.
The regulator, however, imposed strict compliance and risk-management conditions on the transactions. That is, authorised dealers are required to conduct full know-your-customer and due diligence checks on BDC clients before any FX sale. To further strengthen transparency and accountability, the central bank directed that all licensed BDCs must submit timely and accurate electronic returns in line with existing regulations. It also directed that any unutilised FX must be sold back to the market within 24 hours, as BDCs are prohibited from holding FX positions purchased from the NFEM. Additionally, it restricted settlement practices, mandating that all FX transactions be conducted through settlement accounts with licensed financial institutions.
Interest rates down, reserves up
Price and exchange rate stability, which have been the focus of the Cardoso-led CBN, saw the central bank's Monetary Policy Committee at its February 2026 meeting resolve to reduce the monetary policy rate (MPR), the benchmark interest rate, by 50 basis points to 26.5%, from 27%.
Addressing journalists after the two-day meeting, Cardoso also announced that the country's gross external reserves rose significantly to $50.45bn as of February 16, 2026.
Since Cardoso was appointed in September 2023, Nigeria's central bank has increased interest rates over five times amid aggressive inflation that peaked at over 35%, partly fuelled by an unprecedented liquidity injection into the economy by the previous CBN administration.
Another notable feat recorded by the CBN was the inauguration of the Nigerian Foreign Exchange Code (FX Code), in a strategic step to entrench accountability, compliance, and transparency in the country's foreign exchange market. He also introduced the Electronic Foreign Exchange Matching System (EFEMS), which the CBN says sets clear and enforceable standards for ethical conduct and governance in the forex market.
Reaching out to the diaspora
The CBN says that collaborative international outreach missions with diaspora communities have led monthly diaspora remittance inflows to rise from $250m to far above $600m. Cardoso says he is targeting $1bn in remittances inflow this year and will work alongside commercial banks and international money transfer operators.
Chinyere Almona, director general of the Lagos Chamber of Commerce and Industry, praised the central bank's deviation from aggressive monetary tightening toward a stabilisation phase anchored on disinflation, exchange rate convergence, and improving supply-side conditions.
He noted that the shift was a cautious, positive step in the right direction, adding that it will support the FX market and external reserves accretion.
However, the chief executive of CFG Advisory, Tilewa Adebajo, stressed the need for policymakers to start moving the economy into productivity-led growth.
"We need to start growing this economy at 8 to 10% per annum," he added.
Senior market analyst at FXTM, Lukman Otunuga, said the rate reduction could reinforce recent gains in the foreign exchange market, adding that the growing investor confidence in the Nigerian economy, supported by improved foreign exchange liquidity and rising external reserves, should provide a solid buffer for the local currency.
This special report was produced with the support of the Central Bank of Nigeria. The editorial was produced independently of the CBN or the government.