Olayemi Cardoso credits policy consistency and transparency for historic FX market growth and reduced rate differentials…
Nigeria’s foreign exchange (FX) market is now achieving an average daily turnover of $500 million, often without intervention from the Central Bank of Nigeria (CBN), Governor Olayemi Cardoso has revealed.
Speaking after the 303rd CBN Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, Cardoso said the FX market has transformed into a system driven by “willing buyers and willing sellers,” with a level of transparency previously unseen in the country.
“What we have in the foreign exchange market in Nigeria today is something that has not happened before,” Cardoso said.
“In the sense that you have a market where participants come in, buy at will, sell at will, and do so in an open and transparent process.”
Electronic System Boosts Confidence
The governor credited the Electronic Foreign Exchange Matching System (EFEMS), introduced by the CBN, for strengthening market confidence and contributing to the surge in activity and stability.
“On average, daily turnover hits half a billion dollars, often without the CBN being a participant,” he said.
“For those who remember the old days, markets used to stagnate if the CBN did not intervene. That is now a thing of the past. We have a market that is open, transparent, and governed by clear rules agreed to by all participants.”
Narrowing Rate Gaps and Policy Consistency
Cardoso highlighted that FX rate differentials, previously as high as 60%, have narrowed to about 2%, reflecting improved transparency and equal market access for all participants.
“The market has become more disciplined due to consistent policies and the elimination of policy flip-flops that used to distort the FX space,” he explained.
“These reforms have made Nigeria’s FX market more functional and restored confidence among investors and traders.”
The governor’s remarks underscore the CBN’s efforts to stabilise Nigeria’s currency, promote transparency, and reduce the central bank’s need for frequent market interventions.
