In 2025, Nigeria’s foreign exchange (forex) market has witnessed transformative reforms initiated by the Central Bank of Nigeria (CBN) under Governor Olayemi Cardoso. These measures aim to stabilize the naira, curb speculative activities, and restore investor confidence.
The CBN has intensified its efforts to combat forex speculation, which has historically destabilized the naira. Governor Cardoso emphasized the bank’s commitment to identifying and eliminating bad actors in the forex market.
In a significant move, the CBN revoked the licenses of 4,173 Bureau de Change (BDC) operators for regulatory non-compliance, including failure to render transaction returns and pay renewal fees on time. This action underscores the bank’s resolve to enforce discipline and transparency in the forex market.
To further enhance transparency and ethical conduct, the CBN launched the Nigerian Foreign Exchange Code (FX Code) in January 2025. This code sets clear standards for market participants, promoting accountability and good governance. Institutions are required to conduct self-assessments and report their compliance levels to the CBN.
The CBN has also embraced technology to improve market operations. In December 2024, it automated foreign currency trades, replacing the over-the-counter system. This move aimed to enhance transparency, eliminate market distortions, and facilitate a market-driven exchange rate accessible to the public.
These reforms have yielded positive economic indicators. Nigeria’s foreign reserves exceeded $40 billion by the end of 2024, marking the highest level in three years. Additionally, the country posted a balance of payments surplus of $6.83 billion in 2024, reflecting successful economic reforms and increased investor confidence.
Global investors have taken note. JPMorgan Chase & Co. announced plans to upgrade its representative office in Lagos to a full-service branch, applying for a merchant banking license. This move signifies growing international confidence in Nigeria’s financial reforms.
Despite these advancements, challenges persist. The naira experienced significant depreciation over the past two years, and inflation remains a concern. Analysts suggest that addressing security issues in food-producing regions could help reduce food inflation, a major contributor to rising prices.
Nigeria’s aggressive forex market reforms in 2025 demonstrate the CBN’s commitment to stabilizing the naira and fostering a transparent, investor-friendly environment. While challenges remain, the positive trajectory indicates a promising future for Nigeria’s economy.