Cardoso downplays $1.37bn reserve drop, cites strong FX liquidity

GOVERNOR of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, has said the recent decline in the country’s external reserves is not a source of concern, pointing instead to improved liquidity in the foreign exchange (FX) market.

Cardoso made the remarks on Friday during a joint press briefing with Minister of Finance, Mr Wale Edun, in Washington, DC, the United States. The briefing formed part of updates from Nigeria’s delegation, led by Edun, at the 2026 Spring Meetings of the International Monetary Fund (IMF) and the World Bank.

Speaking to journalists, the CBN governor noted that Nigeria’s FX market has evolved significantly, transitioning from a system largely controlled by the apex bank to a more market-driven structure.

“The foreign exchange system that used to operate in those days is very different from what it is now,” Cardoso said, explaining that the market is no longer dominated by the central bank. “It is market-driven. There is more liquidity in the market. There is confidence. Investors come in and go out as they like.”

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He added that the improved liquidity has reduced the need for frequent interventions by the CBN. Cardoso had earlier stated in November 2025 that the FX market records an average daily turnover of about $500 million, often without direct participation from the central bank.

According to him, the current framework operates on a ‘willing buyer, willing seller’ model, supported by transparent processes that allow market participants to track buying and selling activities in real time.

On the issue of declining reserves, Cardoso maintained that fluctuations are normal and should not trigger concern. He stressed that Nigeria’s reserve levels remain comfortably above the minimum threshold recommended by the IMF.

“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,” he said. “It’s normal. Honestly, there is nothing to worry about.”

Data from the CBN show that Nigeria’s external reserves fell by $1.37 billion, or 2.75 percent, over a six-week period, from $50.02 billion recorded on March 11 to $48.64 billion as of April 16.

Meanwhile, Fitch Ratings has projected that the country’s reserves could decline further to $47 billion by the end of the year.

Cardoso also disclosed that the CBN is targeting a significant boost in diaspora remittances, with a goal of reaching $1 billion in monthly inflows by the end of 2026. Current remittance inflows stand at approximately $600 million per month.