Nigeria Central Bank Unveils FX Manual to Stabilize Naira

Olayemi Cardoso, Governor of the Central Bank of Nigeria, unveiled the fourth edition of the CBN Foreign Exchange Manual, a revised framework designed to tighten market oversight, standardize FX operations, and improve transparency within the banking system. The reforms, effective June 1, aim to restore confidence in the naira and attract foreign capital following years of exchange-rate instability and dollar shortages. The updated manual introduces revised standards for dealer responsibilities and compliance monitoring, seeking to build institutional credibility and reduce inefficiencies in currency market administration. However, the foreign exchange market continues to experience significant stress due to a structural shortage of US dollars. Demand from importers, manufacturers, and offshore investors continues to outstrip official supply, maintaining a persistent gap between official and parallel-market pricing. Investors and economists maintain that the reforms' success depends on the government's ability to resolve structural liquidity constraints and ensure consistent access to dollars for profit repatriation and imports. Market participants indicate that the primary constraint remains insufficient foreign exchange inflows, which are heavily dependent on volatile crude oil revenues, limiting the practical impact of regulatory improvements alone.