Economy
Nigeria’s Foreign Exchange Market Finds New Stability: Cardoso’s Reforms
Nigeria’s Foreign Exchange Market Finds New Stability: Cardoso’s Reforms
Nigeria’s foreign exchange market finds new stability: Cardoso’s reforms. Since assuming office, Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has made significant strides in stabilising the foreign exchange market, rebuilding foreign reserves, and taming inflation— while restoring confidence in Nigeria’s monetary policy.
These developments mark a clear departure from the chaotic exchange rate environment that previously defined Nigeria’s financial sector.
Before Cardoso’s reforms, Nigeria operated a fragmented and opaque foreign exchange regime with multiple FX windows, ranging from the official I&E window to various interventions and retail channels.
This system allowed for wide discrepancies in pricing, often creating arbitrage opportunities for insiders while excluding legitimate businesses and ordinary Nigerians from fair access to dollars. Also,the gap between the official and parallel market rates frequently exceeded 60%, fueling black market speculation and discouraging foreign investment.
One central achievement of Cardoso’s leadership of the Central Bank has been the unification of the foreign exchange windows and the implementation of a transparent “willing buyer, willing seller” digital platform. This reform, which replaced the multiple FX windows, has allowed for efficient price discovery and market-led exchange rate determination.
As a result, the parallel market premium, which used to exceed 60%, has narrowed to as little as ₦1. The official exchange rate has stabilised at around ₦1,531/$1, nearly matching the rate in the parallel market. This significant compression has essentially eliminated arbitrage opportunities and is gradually rendering black-market currency trading obsolete.
Cardoso himself acknowledged the systemic instability he inherited and praised the CBN’s new trajectory, saying, “We inherited a crisis of confidence but chose a different path. We’re not turning back.” His remarks reflect a broader strategy aimed at removing opacity from the financial system, restoring trust, and encouraging formal sector engagement.
The FX market now operates with more transparency, and banks no longer redirect customers to street-level currency dealers—one of the most visible indicators of the system’s past dysfunction.
Equally notable is the progress in rebuilding Nigeria’s foreign reserves. With improved oil receipts, increased investor confidence, and a wave of foreign portfolio inflows, the country’s reserves have rebounded from below $35 billion to over $40 billion by mid-July 2025. In June alone, Nigeria saw foreign portfolio inflows exceed $2.7 billion, a 315% increase compared to April.
These flows have contributed to a healthier balance of payments position, provided roughly 9 to 10 months of import cover, and significantly reduced pressure on the Naira. According to Cardoso, these trends reflect Nigeria’s “shift from vulnerability toward strength,” signalling to investors that the country is regaining its financial footing.
Meanwhile, the inflation picture, although still challenging, shows signs of consistent improvement. Headline inflation has fallen from a high of 34–35% in late 2024 to 22.22% as of June 2025. This progress is the result of tighter monetary policy anchored by a steady Monetary Policy Rate of 27.5% and better FX market liquidity.
While food and core inflation remain elevated, Cardoso’s CBN has reiterated its commitment to price stability and medium-term inflation targeting. “Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” he stated recently.
Comparatively, the macroeconomic landscape has shifted significantly in less than a year. The exchange rate gap has virtually disappeared, reserves are growing, inflation is moderating, and investor confidence is returning.
Cardoso’s reforms mirror the kind of bold policy stance seen during President Bola Tinubu’s removal of fuel subsidy, a decision that collapsed the black market for petrol overnight. Similarly, as market transparency and monetary discipline take root, the demand for informal FX services is drying up naturally.
CBN
There is however reason for cautious optimism. Cardoso has shown that consistent, data-driven, and transparent policy can reset Nigeria’s monetary framework. FX arbitrage is fading, banks are regaining credibility, and the country’s reserves now provide a buffer against future shocks.
If sustained, these reforms could anchor long-term macroeconomic stability and real-sector growth. The groundwork has been laid; the challenge now is continuity and political will.
In summary, Cardoso is winning the early rounds of Nigeria’s economic recalibration. He is not merely managing a crisis, he is engineering a recovery.
And as the gap between official policy and economic outcomes narrows, Nigerians may finally begin to feel the relief that only true macroeconomic stability can offer.
Oyalowo, a development economist, can be reached on X (formerly Twitter) @AyoOyalowo
Eid-el-Fitr: NRC Sets To Run Three Lagos–Ibadan Train Trips Monday
Eid-el-Fitr: NRC sets to run three Lagos–Ibadan train trips Monday. He assured passengers of NRC’s continued commitment to safe, reliable, and efficient rail services.
This was contained in a statement issued on Friday in Lagos by NRC chief public relations officer, Callistus Unyimadu.
He said the additional trip was in response to high passenger turnout during the Eid-el-Fitr travel period.
“The extra trip is aimed at easing passenger movement and providing more travel options for commuters returning after the Eid-el-Fitr celebrations.
“Under the schedule, departures from Lagos (Mobolaji Johnson Station, Ebute Metta) will be at 7.45 a.m., 1.40 p.m., and 4.00 p.m.
“From Ibadan (Obafemi Awolowo Station, Moniya), trains will depart at 8.00 a.m., 10.50 a.m., and 4.30 p.m.,” he said.
Mr Unyimadu assured passengers of NRC’s continued commitment to safe, reliable, and efficient rail services.
NRC Sets To Run Three Lagos–Ibadan Train Trips Monday
He advised travellers to arrive early, comply with ticketing and security procedures, and plan their journeys.
“The corporation appreciates the continued patronage of its services and wishes all passengers a safe and pleasant journey,” he added.
UBA, BII Sign Letter Of Intent To Explore Trade Finance Collaboration Across Africa
United Bank for Africa (UK) Limited (“UBA UK”) and British International Investment plc (“BII”), the UK’s development finance institution and impact investor, announced that they have signed a letter of intent to develop trade finance collaboration opportunities.
The proposed initiative aims to expand access to trade and working capital facilities for businesses operating across Africa.
Access to trade finance remains one of the most significant structural constraints on African trade. Businesses, particularly small and medium-sized enterprises, are frequently unable to secure letters of credit, guarantees, and supply chain finance on commercially viable terms, limiting their capacity to export and import competitively. This trade finance gap is estimated by the African Development Bank to be over USD 80 billion annually.
To help close this gap, UBA UK, the London subsidiary of UBA Group, Africa’s Global Bank, will leverage its deep relationships across the Group’s 20-country African network to originate and structure trade finance transactions. While BII, with a mandate to support productive, sustainable, and inclusive growth across Africa, can support transactions that might otherwise fall outside conventional commercial appetite.
“The signing of this letter with BII represents a landmark moment for UBA UK and for the UBA Group’s global ambitions. As the Group’s hub for Trade Operations, UBA UK is uniquely positioned to connect African businesses with the international financial system. Working alongside BII, we can extend that capability further — mobilising capital where it matters most and helping to close the trade finance gap that holds back so much African potential,” said Lok Mishra, Chief Executive Officer, UBA UK
“British International Investment is committed to catalysing private sector growth across Africa, and trade finance is a critical enabler of that growth. We welcome the opportunity to collaborate with UBA Group, whose pan-African network and deep institutional relationships can help advance our ambition to expand access to trade and working capital finance, particularly in frontier markets,” Chris Chijiuitomi, Managing Director and Head of Africa
The announcement builds on growing momentum around intra-African trade facilitated by the African Continental Free Trade Area (AfCFTA), which entered into force in 2021 and represents one of the world’s most significant trade integration initiatives. Both institutions have identified the operationalisation of AfCFTA as a priority catalyst for a trade finance facility, with UBA UK’s network across major AfCFTA economies offering a basis for supporting businesses navigating the emerging continental market.
This also complements the UK Government’s broader engagement with African economic development, including commitments made at the UK-Africa Investment Summit, and reinforces the City of London’s role as a leading international finance centre for Africa-focused capital mobilisation.
Future cooperation remains subject to further assessment, due diligence and the completion of internal approvals by both parties.
ABOUT UNITED BANK FOR AFRICA (UK) LIMITED
UBA UK is the London-based subsidiary of United Bank for Africa Plc, one of Africa’s leading financial institutions with operations across 20 African countries, the United Kingdom, the United States of America, France, and the United Arab Emirates. UBA UK serves as the Group’s hub for Trade Operations, providing a comprehensive suite of trade finance, treasury, and correspondent banking services to institutional and corporate clients worldwide.
UBA
ABOUT UNITED BANK FOR AFRICA GROUP
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group-wide and serving over 45 million customers globally. Operating in twenty African countries, the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting-edge technology.
ABOUT BRITISH INTERNATIONAL INVESTMENT
British International Investment is the UK’s development finance institution and impact investor. The organisation invests in businesses in developing countries to improve people’s lives and help protect the planet. BII’s work targets the underlying causes of poverty and the climate crisis, helping countries break free from aid dependency for good.
Between 2022-2026, at least 30 per cent of BII’s total new commitments by value will be in climate finance. BII is also a founding member of the 2X Challenge which has raised over $33.6 billion to empower women’s economic development.
The company has investments in over 1,600 businesses across 66 countries and total net assets of £9.87 billion. For more information, visit: www.bii.co.uk | watch here. Follow British International Investment on LinkedIn, Bluesky and X.
Eid-el-Fitr: President Tinubu Felicitates Muslims, Urges Renewed Unity, Patriotism
Eid-el-Fitr: President Tinubu felicitates Muslims, urges renewed unity, patriotism. Mr Tinubu called on Muslims to reflect on the spiritual lessons of Ramadan.
The president urged them to renew commitment to national unity, peaceful coexistence, and service to humanity as they celebrate the festival across the country on Friday.
This is contained in a statement issued by presidential spokesperson, Bayo Onanuga, on Thursday in Abuja.
Mr Tinubu called on Muslims to reflect on the spiritual lessons of Ramadan, noting that the holy month teaches discipline, sacrifice, compassion, and devotion to God and humanity.
He said: “We have a lot to draw from the noble lessons of Ramadan, especially at a time like this.
“We must continue to abide by the virtues of piety, selflessness, perseverance, kindness and compassion beyond this period.”
The president emphasised the need for Nigerians to remain united across religious and ethnic lines, stressing that national cohesion remains vital for sustainable peace and development.
He urged Muslims to extend acts of kindness and charity to the less privileged, irrespective of religious or ethnic background, in line with the enduring values of Islam.
Mr Tinubu noted that such gestures would strengthen social bonds, promote inclusiveness, and reinforce the spirit of brotherhood that defines the Nigerian society.
The president also called on religious leaders to use the occasion to offer prayers for peace, stability, and economic prosperity across the country.
Tinubu
He expressed optimism that with collective efforts, Nigeria would overcome its challenges and achieve lasting progress for the benefit of all citizens.
Mr Tinubu wished Muslims a joyous celebration, praying that the blessings of Ramadan would bring renewed hope, strength, and guidance to individuals, families, and the nation.
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