Cardoso says FX market turnover now $500m daily without CBN participation

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says the country’s foreign exchange (FX) market is now recording an average daily turnover of $500 million — often without the CBN having to intervene.

Cardoso spoke at a press briefing after the 303rd CBN monetary policy committee (MPC) meeting in Abuja on Tuesday.

He said Nigeria now operates a market driven by “willing buyers and willing sellers,” with transparent processes that allow participants to see who is buying and who is selling at any point in time.

“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 there are willing buyers, willing sellers. They come in, they buy at will, they sell at will, and you have a process that is open and very transparent.”

According to the CBN governor, the electronic foreign exchange matching system (EFEMS) introduced by the apex bank has strengthened confidence in the market, contributing to the surge in activity and stability.

“It is for that reason that, on average, on a daily basis, we have half a billion dollars in turnover, in market activity, with many times the CBN not being a participant in that market,” he said.

“For those of you who will remember how markets used to operate in those days, if the CBN does not intervene, nothing happens. That is now a thing of the past.

“We have a market that is open, that is transparent, and that plays in accordance with certain rules that everybody has signed up to.

“So these are all the things that have contributed to the way and manner in which our foreign exchange market operates, and which we have had stability in that market.”

‘FX MARKET MORE FUNCTIONAL DUE TO POLICY CONSISTENCY’

The CBN governor also said FX rate differentials — once as high as 60 percent — have narrowed to about 2 percent due to improved transparency in the system.

“Everybody has equal access to a market that has become very open and very transparent,” he said.

Cardoso said the FX market has become more disciplined, backed by policy consistency and the absence of policy “flip-flops” that previously distorted the market.

The CBN governor said the reforms have made Nigeria’s FX market “more functional” and restored confidence among participants.