Nigeria's FX Market Sees Improved Liquidity, Less Central Bank Control

CBN Governor Olayemi Cardoso says reforms have boosted investor confidence and reduced need for frequent interventions.

Apr. 18, 2026 at 7:18pm

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A geometric abstract illustration composed of overlapping triangles and circles in shades of blue, green, and red, conceptually representing the increased liquidity and reduced central bank control in Nigeria's foreign exchange market.Nigeria's foreign exchange market reforms have transformed the system into a more open, transparent, and liquid platform driven by market forces.Washington Today

The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says the country's foreign exchange market is now more liquid and less dependent on central bank control, thanks to ongoing reforms. Cardoso explained that the FX system has shifted from a model where the CBN largely dictated rates and supply to a more open, market-driven approach with improved transparency and confidence. He noted that average daily turnover has reached around $500 million, with many transactions completed without direct central bank involvement.

Why it matters

The changes in Nigeria's FX market structure are seen as crucial for improving long-term stability and boosting foreign investment inflows, which are key priorities for policymakers amid concerns over recent declines in the country's external reserves.

The details

According to Cardoso, the improved market structure has significantly reduced the need for frequent interventions by the apex bank, as transactions are now largely driven by 'willing buyers and willing sellers' operating in a more transparent environment. He also revealed that the CBN is targeting a significant rise in diaspora remittances, projecting inflows of up to $1 billion monthly by the end of 2026, compared to current levels of about $600 million per month.

  • On March 11, Nigeria's external reserves reached a 17-year high of $50.02 billion.
  • By April 16, the reserves had declined to around $48.64 billion, a drop of about $1.37 billion over a six-week period.

The players

Olayemi Cardoso

The Governor of the Central Bank of Nigeria (CBN).

Wale Edun

The Minister of Finance of Nigeria.

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What they’re saying

“The foreign exchange system that used to operate in those days is very different from what it is now. It is market-driven. There is more liquidity in the market. There is confidence. Investors come in and go out as they like.”

— Olayemi Cardoso, Governor, Central Bank of Nigeria

“We already have way beyond what the IMF even recommends for you to have as your minimum reserve level. We are in a very comfortable position. It's normal. Honestly, there is nothing to worry about.”

— Olayemi Cardoso, Governor, Central Bank of Nigeria

What’s next

The CBN is targeting a significant rise in diaspora remittances, projecting inflows of up to $1 billion monthly by the end of 2026, compared to current levels of about $600 million per month.

The takeaway

The reforms in Nigeria's foreign exchange market have led to increased liquidity, reduced central bank control, and improved investor confidence, which are crucial for attracting foreign investment and boosting economic stability in the long run.